can you do this, without penatly? I heard this somplace and i know its a fact you can use some of your 401K....
This retirment fund is setup by my company which i can move after im fullly vested in the company (and leave the company - which im probally doing) else i lose it
thanks in advanced
sophie78
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Re: Retirement money for down payment?
A lot of places won't allow you to do this. They want to protect you.
sophie78
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Re: Retirement money for down payment?
I also think that sometimes they will allow you to remove the money and then replace it within a certain period without penalty. However, I might have made that up.
KimberlyBride
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Re: Retirement money for down payment?
Yes what am470 said is correct you can take a loan from the 401K and pay it back within a certain amount of time and not have to pay a penalty. They call it a hardship loan.
But all the financial experts say this is a last resort. You should never touch your 401K money. But these days and living on LI it is hard to have that big of a chunk for a DP. Good luck!
DjPiLL
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Re: Retirement money for down payment?
I took out 10k from my retirement 401k. Paid it back in two years. It wasn't that big a deal as long as you pull from it for a good valid reason (like to buy a house).
WeezieNY
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Re: Retirement money for down payment?
i just looked into this. if its a 401k you are better off taking loan against the money as opposed to a withdrawal. But you have to talk to the plan administrator to find the individual plan rules. There is a exception for first time homebuyers. IF its an IRA, the IRS only allows $10k to come out without a penalty. this is if its a IRA ira withdrawal this is if its 401K 401k good luck
i think one MAJOR catch is that if one leaves the company (voluntarily or involuntarily) then one must find a way to pay back the loan in its entirety on the spot
i believe it varies from plan to plan, but i would definitely look into the above scenario in depth...
dandg
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Re: Retirement money for down payment?
IMO, not a smart move at all! Its not worth it... i have a few friends who are financial planners and they tell people all the time, especially young people (25-35), never to use retirement money for a downpayment. Good luck with your decision!
