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Message
IRA withdrawal for home purchase
Posted on 2/16/13 at 9:28 pm
Posted on 2/16/13 at 9:28 pm
The wife and I are looking to purchase a new home in the near future. After review, I understand that we can take up to 10k from each of our individual IRA accounts without penalty. This is reserved for first time home-buyers, which also applies if you haven't owned a primary residence in the last two years.
We have owned two homes in the past, but sold our last home over 2 yrs ago, so I believe we would qualify.
Has anyone used this option or can provide additional information on how this works?
The downside to this is you are only allowed to do this once in your lifetime before retirement, so this would limit me being able to use this option for my daughter in the future if I was trying to help her purchase a home. But, that's a good time away from now, and I feel it would benefit us the most at this time.
We have owned two homes in the past, but sold our last home over 2 yrs ago, so I believe we would qualify.
Has anyone used this option or can provide additional information on how this works?
The downside to this is you are only allowed to do this once in your lifetime before retirement, so this would limit me being able to use this option for my daughter in the future if I was trying to help her purchase a home. But, that's a good time away from now, and I feel it would benefit us the most at this time.
1
Posted on 2/17/13 at 7:20 am to tigerzballzdeep
quote:
The downside to this is you are only allowed to do this once in your lifetime before retirement
The real downside is you're robbing 10K out of a retirement investment in the early stages of the game
You can only contribute 5500 a year. Robbing your IRA of 10K will set you back
No way you can just save another 10K over the next year?
Posted on 2/17/13 at 8:02 am to Powerman
Also although you won't have to pay the 10% penalty you will still get a 1099-r counting the 10k as income. So depending in your tax bracket you'll lose a chunk.
Posted on 2/17/13 at 10:27 am to Powerman
Honestly I'm really not concerned about 10k out of my or my wife's IRA at this point. It would represent less than 8% of my current holdings and I'm okay with that.
We also both have our 401k accounts with our current employers that are adding to our retirement accounts.
Frankly, I'm in a better position to take it from the IRAs than to fund it with liquid cash.
We also both have our 401k accounts with our current employers that are adding to our retirement accounts.
Frankly, I'm in a better position to take it from the IRAs than to fund it with liquid cash.
Posted on 2/17/13 at 10:29 am to JB Bama
Thank you for this piece of advice. I will check with our CPA on the additional income this would come out to as it relates to our earnings tax.
Posted on 2/18/13 at 1:05 am to tigerzballzdeep
I would consider pulling a loan from the 401k before the 10k from the IRA IMO
Less of an opportunity cost hit.
Less of an opportunity cost hit.
This post was edited on 2/18/13 at 1:06 am
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