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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?
Thanks!
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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.

TMF ExRO
Phil Marti
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I would not borrow from my 401k if possible. The amount of returns you lose due to the money being out of the market is a strong deterrent imho.
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