Retirement funds: Rollover or cashout?

[5yearwaiter]

[quote=ucodegen]Rolling the accounts over make it easier to manage.. but with a ‘Roll-over’, you have to be willing to do some of the managing yourself (selection of what to invest in).

401K for a down on a house
There is a way to use a 401K for a down on the house without getting a full tax hit. I am not certain of the specifics of it.
[/quote]

I want to know about this with detalis if anyone knows.I doubt we can do this without tax hit

[ucodegen]

401K for a down on a house

1) You can borrow against a 401K (depending upon plan structure) and use the proceeds of that borrowing to use as a down payment for a house. The interest paid on the 401K loan will go back into your 401K, but that interest will not be tax deductible, it will be post tax as will principal payments against that 401K loan. My understanding is that during that period that you have the loan out.. you can’t use the amount for investing in the 401K because it will be tied up in a loan to yourself.
*) Risks.. if you change jobs or get laid off, the amount that was borrowed has to be paid back in very short order (either 30 or 60 days.. before it is considered a ‘distribution’ and you get hit with taxes)

2) Take a distribution.. taxed at income rate AND 10% penalty.

3) Hardship case can prevent fees, and possibly income taxes.. but it will be very difficult to prove if it is being used as a down payment on a house.

** There may be other ways to use a 401K in this manner, but I don’t know what they are off hand.

[ucodegen]

401K for a down on a house

1) You can borrow against a 401K (depending upon plan structure) and use the proceeds of that borrowing to use as a down payment for a house. The interest paid on the 401K loan will go back into your 401K, but that interest will not be tax deductible, it will be post tax as will principal payments against that 401K loan. My understanding is that during that period that you have the loan out.. you can’t use the amount for investing in the 401K because it will be tied up in a loan to yourself.
*) Risks.. if you change jobs or get laid off, the amount that was borrowed has to be paid back in very short order (either 30 or 60 days.. before it is considered a ‘distribution’ and you get hit with taxes)

2) Take a distribution.. taxed at income rate AND 10% penalty.

3) Hardship case can prevent fees, and possibly income taxes.. but it will be very difficult to prove if it is being used as a down payment on a house.

** There may be other ways to use a 401K in this manner, but I don’t know what they are off hand.

[ucodegen]

401K for a down on a house

1) You can borrow against a 401K (depending upon plan structure) and use the proceeds of that borrowing to use as a down payment for a house. The interest paid on the 401K loan will go back into your 401K, but that interest will not be tax deductible, it will be post tax as will principal payments against that 401K loan. My understanding is that during that period that you have the loan out.. you can’t use the amount for investing in the 401K because it will be tied up in a loan to yourself.
*) Risks.. if you change jobs or get laid off, the amount that was borrowed has to be paid back in very short order (either 30 or 60 days.. before it is considered a ‘distribution’ and you get hit with taxes)

2) Take a distribution.. taxed at income rate AND 10% penalty.

3) Hardship case can prevent fees, and possibly income taxes.. but it will be very difficult to prove if it is being used as a down payment on a house.

** There may be other ways to use a 401K in this manner, but I don’t know what they are off hand.

[ucodegen]

401K for a down on a house

1) You can borrow against a 401K (depending upon plan structure) and use the proceeds of that borrowing to use as a down payment for a house. The interest paid on the 401K loan will go back into your 401K, but that interest will not be tax deductible, it will be post tax as will principal payments against that 401K loan. My understanding is that during that period that you have the loan out.. you can’t use the amount for investing in the 401K because it will be tied up in a loan to yourself.
*) Risks.. if you change jobs or get laid off, the amount that was borrowed has to be paid back in very short order (either 30 or 60 days.. before it is considered a ‘distribution’ and you get hit with taxes)

2) Take a distribution.. taxed at income rate AND 10% penalty.

3) Hardship case can prevent fees, and possibly income taxes.. but it will be very difficult to prove if it is being used as a down payment on a house.

** There may be other ways to use a 401K in this manner, but I don’t know what they are off hand.

[ucodegen]

401K for a down on a house

1) You can borrow against a 401K (depending upon plan structure) and use the proceeds of that borrowing to use as a down payment for a house. The interest paid on the 401K loan will go back into your 401K, but that interest will not be tax deductible, it will be post tax as will principal payments against that 401K loan. My understanding is that during that period that you have the loan out.. you can’t use the amount for investing in the 401K because it will be tied up in a loan to yourself.
*) Risks.. if you change jobs or get laid off, the amount that was borrowed has to be paid back in very short order (either 30 or 60 days.. before it is considered a ‘distribution’ and you get hit with taxes)

2) Take a distribution.. taxed at income rate AND 10% penalty.

3) Hardship case can prevent fees, and possibly income taxes.. but it will be very difficult to prove if it is being used as a down payment on a house.

** There may be other ways to use a 401K in this manner, but I don’t know what they are off hand.

[moneymaker]

I would suggest combining everything into 1 401K account then you can borrow up to $50,000 or 50% of 401K, for downpayment on house without penalty. The crux for you may be if you change jobs often, and it appears you may, then you will get hit with the tax and penalty when it changes to a distribution, if you don’t pay it back within 60 days upon leaving job. If you are young and do have savings now would be a good time to convert to a ROTH IRA, because as everyone with a brain knows, taxes are going up in the very near future. The government has to raise taxes or allow inflation(hidden tax), or more likely both. Never mind, just noticed you don’t have 401K with current employer.

[moneymaker]

I would suggest combining everything into 1 401K account then you can borrow up to $50,000 or 50% of 401K, for downpayment on house without penalty. The crux for you may be if you change jobs often, and it appears you may, then you will get hit with the tax and penalty when it changes to a distribution, if you don’t pay it back within 60 days upon leaving job. If you are young and do have savings now would be a good time to convert to a ROTH IRA, because as everyone with a brain knows, taxes are going up in the very near future. The government has to raise taxes or allow inflation(hidden tax), or more likely both. Never mind, just noticed you don’t have 401K with current employer.

[moneymaker]

I would suggest combining everything into 1 401K account then you can borrow up to $50,000 or 50% of 401K, for downpayment on house without penalty. The crux for you may be if you change jobs often, and it appears you may, then you will get hit with the tax and penalty when it changes to a distribution, if you don’t pay it back within 60 days upon leaving job. If you are young and do have savings now would be a good time to convert to a ROTH IRA, because as everyone with a brain knows, taxes are going up in the very near future. The government has to raise taxes or allow inflation(hidden tax), or more likely both. Never mind, just noticed you don’t have 401K with current employer.

[moneymaker]

I would suggest combining everything into 1 401K account then you can borrow up to $50,000 or 50% of 401K, for downpayment on house without penalty. The crux for you may be if you change jobs often, and it appears you may, then you will get hit with the tax and penalty when it changes to a distribution, if you don’t pay it back within 60 days upon leaving job. If you are young and do have savings now would be a good time to convert to a ROTH IRA, because as everyone with a brain knows, taxes are going up in the very near future. The government has to raise taxes or allow inflation(hidden tax), or more likely both. Never mind, just noticed you don’t have 401K with current employer.

[moneymaker]

I would suggest combining everything into 1 401K account then you can borrow up to $50,000 or 50% of 401K, for downpayment on house without penalty. The crux for you may be if you change jobs often, and it appears you may, then you will get hit with the tax and penalty when it changes to a distribution, if you don’t pay it back within 60 days upon leaving job. If you are young and do have savings now would be a good time to convert to a ROTH IRA, because as everyone with a brain knows, taxes are going up in the very near future. The government has to raise taxes or allow inflation(hidden tax), or more likely both. Never mind, just noticed you don’t have 401K with current employer.

[Author]

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