Posted on: 23rd Apr, 2010 08:20 am
I have an IRA and want to use the funds to pay down 2nd mortgage or 1st mortgage or sell my home and use the difference I need to bring to closing to be from my IRA... Will this be a penalty ?
Tracy K Ft Myers Fl
Tracy K Ft Myers Fl
If you're not 59 1/2 years of age, any distribution from your IRA will result in a penalty, yes; in addition, you'll pay taxes on that amount withdrawn. In any event, if you need the funds, it's not necessarily a bad thing.
Hi tennis,
Withdrawal of money from your IRA before the age of 59 1/2 years will attract a penalty of 10%. Besides, the withdrawn amount will be subject to income taxes. However, if you desperately need the money and you have a 401k or a 403b retirement account, you may consider taking a loan from these accounts. The interest you pay on the loan is deposited back into your account. So, you basically take a loan from your own funds and pay it back to yourself. However, if you fail to repay the loan on schedule, the loan will be considered as an early distribution.
Withdrawal of money from your IRA before the age of 59 1/2 years will attract a penalty of 10%. Besides, the withdrawn amount will be subject to income taxes. However, if you desperately need the money and you have a 401k or a 403b retirement account, you may consider taking a loan from these accounts. The interest you pay on the loan is deposited back into your account. So, you basically take a loan from your own funds and pay it back to yourself. However, if you fail to repay the loan on schedule, the loan will be considered as an early distribution.
Since Traditional IRA's are pretax dollars, any withdrawals taken before age 59 1/2 would be subject to penalties.
If you have a Roth IRA, which is post tax dollars, you can withdraw the money you have contributed without penalty. However, if you try to withdraw interest earned on a Roth IRA, that portion would be subject to penalties.
If you have a Roth IRA, which is post tax dollars, you can withdraw the money you have contributed without penalty. However, if you try to withdraw interest earned on a Roth IRA, that portion would be subject to penalties.