What are the penalties for taking an IRA withdrawal for primary home purchases?

Answer by  cgroverla (516)

An individual can withdraw $10,000 from an IRA for a home purchase without penalty. This is a one-time benefit. Income tax will still be owed.

Answer by  inphri (38)

Normally if you are younger than 59.5 years old, there is a 10% penalty for any Traditional IRA withdrawal and any withdrawal from the Roth IRA earnings (but not contributions). The penalty is waived for first-time home purchase up to $10,000. For Roth IRAs, the account must have been open for at least five years to qualify.

Answer by  Liz59 (10966)

There are some fees that may have to paid. I believe this is about 10% fee. However, you can avoid this by necessary paper work if you can prove that there is a reason that you will require early withdrawal. But in most cases, this penalty fee is taken and it is 10%.

Answer by  pedro (142)

You can use up to $10,000 of your traditional IRA for a home purchase without any penalties. You must be a first time homebuyer.

Answer by  maggie711 (285)

Forget the financial penalty, you are taking away a large portion of your retirement account that will never be repaid, putting your retirement in extreme jeopardy. Borrow from family.

Answer by  game77 (10)

Penalty free, early distritutions from IRA's are allowed in certain circumstances. One example is a distribution used to finance a primary home purchase.

Answer by  DtheM1 (1150)

For a first time home purchase, there are no early withdrawal penalties for an IRA. You will only have to pay the tax that you would have paid anyway.

Answer by  Liz59 (10966)

The penalty is the same as for other conditions. It is about 6% if you take an IRA withdrawal. The rate may be more depending on the jurisdiction you live in. You should check into it by searching the government assistance page. It will give you the precise number needed.

Answer by  acgood (47)

There is no penalty to withdraw up to $10,000 from a Roth IRA to purchase your first home.