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Asked 9/1/2009
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401k withdrawal We rencently bought a second home in another state. my wife and i have dual residency. her in one state and me in the other. can i take a 401k withdrawal for buying the second home as a primary residence with the penalty? |
Answer 1/1 - Submitted 9/1/2009
Hardship withdrawals can be used to purchase your primary residence. If the plan allows them. Not all do, and the employer does not have to allow such withdrawals. If it is to be your primary residence, and it is allowed, yes you can withdraw the amount, You have personally contributed (ususually you cannot withdraw the employer contribution, but some plans allow) up to the amount of purchase. A lot of plans allow residential loans as well to purchase the home, and pay over time back into the account through payroll deduct.
If you do the hardship withdrawal it will be subject to federal tax (generally 20%, and penalty if it applies to your age bracket, 10%)
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