attn: finance savvy peeps
12-21-2006, 07:21 PM
#1
The White Man's Burden
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attn: finance savvy peeps
will i get penalized if i cashed out my 401k and roth ira to use towards the purchase of my 1st home? thanks 
12-21-2006, 07:26 PM
#2
un-Touch'd krew
You will have to pay the taxes on the total closeout value of both accounts which is considered a penalty but not sure if there is added early withdrawal penalty or not since it varies from account to account.
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12-21-2006, 07:37 PM
#3
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roth ira: you may cash out your principal if it's been in the account for at least 5 years. any other early withdrawal and you'll get hit with a penalty. you've already paid taxes on it, so you won't get hit with taxes again.
401k: you maybe borrow up to 50% or 50k, whichever is lower. but if you leave your job, you will have to repay immediately or pay penalties and taxes. you repay the loan plus interest (which you get to keep) with after tax dollars. this eventually gets taxed again when you withdraw as an old fogey.
401k: you maybe borrow up to 50% or 50k, whichever is lower. but if you leave your job, you will have to repay immediately or pay penalties and taxes. you repay the loan plus interest (which you get to keep) with after tax dollars. this eventually gets taxed again when you withdraw as an old fogey.