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What is involved in cashing out a 401k to buy a home?

asked by Angelo (7)

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Tags:  finance

answers

Contact HR dept or company managing your 401k ask about penalties associated with drawing out 401k. Most charge 15% interest as you saved without paying interest, then 10% penalty (their maybe is a loophole being a home).They will send you papers takes about 2 weeks.

7 votes

Cashing out a 401(k) before the retirement age results in severe tax penalties. Depending on your situation you may be able to make this up with homebuyer tax credits.

5 votes

It is not advised that you cash out your 401K at any time till you reach retirement, even to add in purchasing a home. When you cash out a 401k you are penalized to a point that makes it not worth it, you are also taxed heavely on the funds you remove.

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posted by Rose (6493)
4 votes

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