401K Withdrawl

[scratch]

I have a question about taking money out of my Traditional 401K. I am currently working and 61 years old. I am thinking about retiring August or October of next year. We are looking at building a new house in an Active 55 Retirement Community and moving then. I want to take some money out of my 401K next Spring as a down payment to start construction before I sell my current home. So my question is can I take some out just for that or do I have to make myself a loan and pay it back to myself?

 

[IVE GOTTA PACKAGE 4U]

I have a question about taking money out of my Traditional 401K. I am currently working and 61 years old. I am thinking about retiring August or October of next year. We are looking at building a new house in an Active 55 Retirement Community and moving then. I want to take some money out of my 401K next Spring as a down payment to start construction before I sell my current home. So my question is can I take some out or do I have to make myself a loan and pay it back to myself?

They do not allow in service withdrawals

The problem with taking a loan out is you have a very limited time to repay it back
I believe it's 60 days after you retire.

Probably isn't a big deal because you wouldn't have a pre 59 1/2 penalty.

Talk to your bank and see what they can do for you.

 

[scratch]

I do have a couple of banker friends so I guess I need to contact them. It seems stupid to loan myself money and have to pay it back at what I assume would be a high interest rate. I just need to come up with $15K to start construction. I plan on paying for half of it when I sell my current home.

 

[IVE GOTTA PACKAGE 4U]

I do have a couple of banker friends so I guess I need to contact them. It seems stupid to loan myself money and have to pay it back at what I assume would be a high interest rate. I just need to come up with $15K to start construction. I plan on paying for half of it when I sell my current home.

Take out a home equity loan?

Quit putting money in the 401k and save the cash?

I don't know, just throwing a few ideas out there?

 

[UpstateNYUPSer(Ret)]

Your best bet to avoid the 20% withholding tax (the 10% penalty would not apply due to your age) would be to take out a loan from your 401k. If you do leave the company while the loan is still active you would have until April 15th of the year after you leave to repay the loan in full. You could do that with the proceeds from the sale of your current home or you could take a partial distribution when you rollover your 401k upon retirement. You would have to pay taxes on the partial distribution.

Can a 401(k) Be Used for a House Down Payment?

 

[UpstateNYUPSer(Ret)]

They do not allow in service withdrawals

The problem with taking a loan out is you have a very limited time to repay it back
I believe it's 60 days after you retire.

Probably isn't a big deal because you wouldn't have a pre 59 1/2 penalty.

Talk to your bank and see what they can do for you.

1. Not true.

2. This was true but was changed with the new tax cuts. You now have until April 15th of the year after you separate to repay the loan in full.

3. True.

4. No need to talk to his bank.

 

[UpstateNYUPSer(Ret)]

Take out a home equity loan?

Quit putting money in the 401k and save the cash?

I don't know, just throwing a few ideas out there?

1. Take out a HELOC in the year he wants to sell? Uh.....no.

2. Nope.

3. Stick to Romper Room.

 

[Jkloc420]

actually you can take your 401k out after age 59 for whatever, regardless if your working and you dont need a loan

 

[UpstateNYUPSer(Ret)]

actually you can take your 401k out after age 59 for whatever, regardless if your working and you dont need a loan

....true but you still have to pay the 20% Federal tax withholding...

The loan is the best option in this case.

 

[Jkloc420]

or you can ask for a loan if you wish to pay yourself back

 

[Jkloc420]

....true but you still have to pay the 20% Federal tax withholding...

The loan is the best option in this case.

They would take it off the top, he would have the option to pay it when he takes the funds.

 

[Jkloc420]

If he wanted he could just take the whole amount pay the taxes and avoid it later down the road

 

[UpstateNYUPSer(Ret)]

They would take it off the top, he would have the option to pay it when he takes the funds.

That's what I thought but couldn't find anything online to confirm it.

 

[IVE GOTTA PACKAGE 4U]

1. Take out a HELOC in the year he wants to sell? Uh.....no.

2. Nope.

3. Stick to Romper Room.

He would get a better rate than his 401k

Stick to no posting on BC like you promised

Or change your screen name to Liar

 

[Jkloc420]

That's what I thought but couldn't find anything online to confirm it.

Prudential gives you the option, i dont know about other funds, just making an assumption they would to

 

[scratch]

I have been cramming my 401K as much as possible lately, I raised my weekly contribution to 25% up from 20. I stuck all of my Option Week in there yesterday too. I really don't want to take anything out of it. I have a couple of people wanting me to invest in Variable Annuities but my future home plans are giving me second thoughts about that. Options off the top of my head are to get a bank loan, 401K withdrawl, or use a credit card. I have zero credit card debt and a 820 FICO score so getting loans are no problem.

 

[IVE GOTTA PACKAGE 4U]

or you can ask for a loan if you wish to pay yourself back

Bit he only has 60 days to pay the loan back after he retires.

 

[Jkloc420]

i

I have been cramming my 401K as much as possible lately, I raised my weekly contribution to 25% up from 20. I stuck all of my Option Week in there yesterday too. I really don't want to take anything out of it. I have a couple of people wanting me to invest in Variable Annuities but my future home plans are giving me second thoughts about that. Options off the top of my head are to get a bank loan, 401K withdrawl, or use a credit card. I have zero credit card debt and a 820 FICO score so getting loans are no problem.

depends on how long you plan to live, other sources of income and if you want the money down the road

 

[UpstateNYUPSer(Ret)]

Have you asked the builder if he/she would be willing to finance the $15K?

 

[IVE GOTTA PACKAGE 4U]

I have been cramming my 401K as much as possible lately, I raised my weekly contribution to 25% up from 20. I stuck all of my Option Week in there yesterday too. I really don't want to take anything out of it. I have a couple of people wanting me to invest in Variable Annuities but my future home plans are giving me second thoughts about that. Options off the top of my head are to get a bank loan, 401K withdrawl, or use a credit card. I have zero credit card debt and a 820 FICO score so getting loans are no problem.

You will figure it out

But please don't invest into an annuity
I know you have a friend in the business but get a second opinion