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|Subject: Re: Withdrawing 401(K)to purchase a house||Date: 12/11/2000 11:49 PM|
|Author: TMFExRO||Number: 26554 of 75340|
I'm looking for help on the subject above. I was told that if I'm a first-time buyer, I can use the money on my retirement account as a down payment without paying taxes or penalties. Is this true?
No. All withdrawals of pre-tax money from a 401(k) are taxed as ordinary income, and there's no homebuyer exception for money taken from a 401(k), so you'd also owe the 10% premature distribution penalty.
You may be able to get a loan against your 401(k) for this purpose, but that's a totally different concept. It can also be very dangerous, so tread carefully. Your starting point is your plan administrator.
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