Ask Experts Questions for FREE Help !
Ask
    WantingRE's Avatar
    WantingRE Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Jul 17, 2008, 04:25 PM
    Using 401k to Purchase First Home
    I have an old 401k from a previous employer. I am no longer contributing it and it's basically just sitting there. Can I withdraw part of it to use as a downpayment for a first home? I have heard that you can do that and also avoid the penalty (10%) as long as you are using it toward a first home. I only want to use part of it for this purchase, and roll over the rest to my current employer's 401k program. Please advise.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
    Expert
    		  
    #2

    Jul 17, 2008, 05:18 PM
    You will of course have to always pay the actual income tax ( state and federal) on the money. There are things you will have to prove to not have to pay the 10 percent

    How To Purchase a Home Using a 401k | eHow.com
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #3

    Jul 17, 2008, 11:33 PM
    I think that if you withdraw from 401K for purchase of first home, you will still pay 10% early withdrawal penalty.
    You may borrow money from 401K.
    Another option is to roll the down payment into a rollover IRA, then make the withdrawal from the IRA. You can withdraw funds (up to $10,000) from a traditional/rollover IRA for a home purchase if you qualify as a first-time home buyer and thus avoid the 10% Early withdrawal Penalty.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Withdrawing my 401k to purchase a business [ 1 Answers ]

I'm currently looking at a business that I want to purchase. I have approximately $40k in an E-trade account. I know that if I withdraw this money I will be charged a %. Can you please tell me what I can expect between penalties and taxes? Also what if I invest in a business with it?

401(k) to purchase new home [ 1 Answers ]

I am considering using a small amount of my retirement account toward the purchase of our new home - what are the penalties/ramifications of doing this?

Home Purchase [ 1 Answers ]

I am trying to purchase a home. The selling price for the want I want is $215,000. It is beyond my budget. I was told that the sellers can't drop their price because they will loose money. I want my mortgage to be within my means... Is there anything I can do to change their minds? When they...

Looking to purchase my first home [ 3 Answers ]

Hi: I am in my late 20's and am looking to purchase my first home within the next few months. I have been on my job for 3 years, and I make a decent salary for my age. I ran my credit the other day and it looks as though I owe about $800 on my credit. I recently purchased an 06 Chevy, interest...

View more questions Search