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I am in the process of selling my home AND changing jobs.I will be making a profit (sale price minus outstanding mortage). I plan to pay off my credit card debt with the proceeds from this sale, or am I better off taking the 401k distribution available to me because of the job change. My intent is to purchase a nother home in about 12 months. Thanks to all who reply. Regards,
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rsavoy: "I am in the process of selling my home AND changing jobs. I will be making a profit (sale price minus outstanding mortage). I plan to pay off my credit card debt with the proceeds from this sale, or am I better off taking the 401k distribution available to me because of the job change. My intent is to purchase a nother home in about 12 months."

I am not sure that I fully understand the question, but here goes --- it rarely makes sense to take an early distribution from a 401k (or IRA, for that matter) to pay CC debt. You will owe income taxes and a 10% penalty if you are less than 59 1/2.

I also respectfully disagree that "sale price minus outstanding mortage" measures your "profit" from the sale of the home, but that is a discussion for a different post, if you are inerested. Based ont he limited information you have given us, I would use the net proceeds of the sale to pay the CC debt.

Just my $0.02. Regards, JAFO

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I am in the process of selling my home AND changing jobs.I will be making a profit (sale price minus outstanding mortage). I plan to pay off my credit card debt with the proceeds from this sale, or am I better off taking the 401k distribution available to me because of the job change. My intent is to purchase a nother home in about 12 months

***If you are under age 59 1/2, you don't want to be touching your 401k plan. You would have to pay the tax plus 10% penalty, unless you qualifed, under some exception, to be free of the penalty. You would still have to pay the tax. By the time the feds and state got through with you, you could end up paying over 50% tax on such a distribution. One suggestion would be that you roll the plan over (direct transfer) into an IRA or opt to leave it in the current plan (if allowed). You could use the IRA as a conduit to hold the 401k and later move it into a new employer's plan, if you so decide. Depending on circumstances, you might want to take distributions over a period of years, in order to avoid penalty. Again, the distributions would be taxable.

***If you lived in your home, as your primary residence, for two, out of the last five years prior to selling it, you would qualify for up to $250,000 in tax free gains (($500,000, if married filing jointly).

Paying off the credit cards sounds like a great idea. I'd do that ASAP from the money you get from the sale of the property. The additional amount you may have to borrow, for a mortgage on your new home, should end up being a much cheaper way to go.

"Jack"
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OK, Thank you for the advice, I plan to pay off all my credit card debt with proceeds from the house sale. I also plan on rolling over my 401k into an IRA for at least a year (until I purchase another home, at that point I will probably roll it into my new employers plan). Am I correct in thinking that at that point I will be able to withdraw from the plan towards the purchase of a home without paying any type of penalty? Am I being foolish??? Thanks in advance...
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OK, Thank you for the advice, I plan to pay off all my credit card debt with proceeds from the house sale. I also plan on rolling over my 401k into an IRA for at least a year (until I purchase another home, at that point I will probably roll it into my new employers plan). Am I correct in thinking that at that point I will be able to withdraw from the plan towards the purchase of a home without paying any type of penalty? Am I being foolish???

You would be able to withdraw up to $10,000 from an
IRA, penalty free.

However, remember that the 401K plan, is being held in a conduit IRA (which you plan on rolling over into a new employer plan). You don't want to be playing around with that plan, making new contributions to it, or taking distributions from it. IOW, keep that particular IRA clean. Do not contaminate it in any way.

"If you receive an eligible rollover distribution from your employer's plan and roll over part or all of it into one or more conduit IRAs, you can later roll over those assets into a new employer's plan. An IRA qualifies as a conduit IRA if it is a traditional IRA that serves as a holding account or conduit for only those assets. The conduit IRA must be made up of only those assets received from the first employer's plan and gains and earnings on those assets. A conduit IRA will no longer qualify if you mix regular contributions or funds from other sources with the rollover distribution from your employer's plan".(end quoted material-Pub 590)

"Jack"

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