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Greetings, Plansfailed, and welcome. You wrote:

I have IRA's in three different companies and am of the ripe age of 40 years old. Times are as tough as ever and with losing my job and the
desire to start my own business, not to mention, finish building a house, I need to get a hardship loan against my IRA's to finish the house and get a business going, is this possible? If not, cashing them out is the next alternative as the banks will not loan me any money at the present.

All feedback will be appreciated. I understand that a 10% penalty will be imposed and taxes assessed but my income, so far this year, is at an all time low.

Sorry about you run of bad luck; however, you may not make a "hardship loan" from your IRA. All you may do is make a withdrawal. If that withdrawal meets one of the authorized eight exceptions, then you will pay income taxes on what you take but no penalty. If it doesn't meet one of the exceptions, then you must pay the 10% early withdrawal penalty as well. These eight exceptions are those that:

1. Occur because of the IRA owner's disability.
2. Occur because of the IRA owner's death.
3. Are a series of "substantially equal periodic payments" made over the life expectancy of the IRA owner.
4. Are used to pay for unreimbursed medical expenses that exceed 7 1/2% of adjusted gross income (AGI).
5. Are used to pay medical insurance premiums after the IRA owner has received unemployment compensation for more than 12 weeks.
6. Are used to pay the costs of a first-time home purchase (subject to a lifetime limit of $10,000).
7. Are used to pay for the qualified expenses of higher education for the IRA owner and/or eligible family members.
8. Are used to pay back taxes because of an Internal Revenue Service levy placed against the IRA.

For details, see IRS Publication 590 (Individual Retirement Arrangements) available for download at


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