Buy a Home with your 401k & IRA

Use Retirement Assets No Matter Your Age

You’ve been putting money into your retirement accounts, but that doesn’t mean you have to wait until you are retired to utilize those investments. Buying a home is one of the few times you can pull from IRAs and 401ks before the age of retirement (59½ years old). There are 2 tax penalty free ways to do this when buying a home.

IRA Withdrawal

First-time homebuyers can pull IRA funds to buy a home. Normally, pulling from an IRA before retirement age comes with an additional 10% tax penalty. However, if you pull funds in order to buy your first home, you are penalty free! You can withdraw up to $10,000 from an IRA without paying the 10% penalty no matter your age.

401k Loans

The rich take loans on their assets to avoid paying taxes and so can you. Most 401k providers allow you to take a loan on your account for half of the balance or up to $50,000. The best part is the repayment and interest goes back into your 401k, so you are essentially paying yourself back. It is important to talk to your 401k plan administrator as well as your lender for more details.