if i withdraw from my 401 to buy a home in Mexico. how long do i have to replace the withdrawn funds before i get the 10% penalty?
2007-09-02 05:42:53 · 4 answers · asked by hwood 1 in Business & Finance ➔ Personal Finance
There is no repayment period. If you withdraw the funds, you will be subject to the 10% penalty and income tax. Since the amount will be added to your regular income, it will be taxed at a higher rate.
You may be able to borrow from your 401 depending on your company's policy. Check with the plan administrator.
2007-09-02 06:34:31 · answer #1 · answered by bdancer222 7 · 0⤊ 0⤋
For my plan, you can take a loan or a hardship withdrawal. There are a certain set of situations in which they will approve a withdrawal, and I'm not sure buying a home in Mexico would apply. I think buying your first home, medical emergencies, etc. qualify.
You could probably get a loan, but know that you are going to have to pay taxes on that money twice- first when you repay it, and then when you take it out in retirement. Your money also loses the opportunity to grow while it is out of your account. In other words, this pretty much eliminates any benefit you had from investing in the 401(k) in the first place. It's hard to advise you without knowing more about your situation, but it is almost always a bad idea to take money out of your 401(k.)
2007-09-02 17:48:11 · answer #2 · answered by fawkesphoenix 3 · 0⤊ 0⤋
You can withdraw up to $10,000 from your 401K once in a lifetime without penalty as long as it is going towards the purchase of a home. You will still have to pay taxes on the money.
2007-09-03 02:25:41 · answer #3 · answered by Anonymous · 0⤊ 0⤋
If you are leaving job, you have 60 days to put the money in to an IRA or else you get hit with the penalty.
Generally speaking, the only way to get money out of an 401k is to quit or be fired.
2007-09-02 23:58:11 · answer #4 · answered by Wayne Z 7 · 0⤊ 0⤋