Liquidating 401k to buy home
May I withdraw amounts held in my SIMPLE IRA at any time? Your employer can't require you to retain any portion of the contributions in your SIMPLE IRA or otherwise impose any withdrawal restrictions.
What are the tax consequences when I withdraw amounts from my SIMPLE IRA?
Data and information is not intended for solicitation or trading purposes.
Please consult your tax and legal advisors regarding your individual situation.
If you're under age 59½, you'll owe a 10 percent federal penalty tax, as well as regular income tax on the outstanding loan balance (other than the portion that represents any after-tax or Roth contributions you've made to the plan).
Your 401(k) plan may have a provision that allows you to withdraw money from the plan while you're still employed if you can demonstrate "heavy and immediate" financial need and you have no other resources you can use to meet that need (e.g., you can't borrow from a commercial lender or from a retirement account and you have no other available savings).
No matter how much you have in your 401(k) plan, you probably won't be able to borrow the entire sum.
Generally, you can't borrow more than ,000 or one-half of your vested plan benefits, whichever is less.
The fees are limited too--you may be charged a small processing fee, but that's generally it.
The option to take a hardship withdrawal can come in very handy if you really need money and you have no other assets to draw on, and your plan does not allow loans (or if you can't afford to make loan payments).
Important Note: AXA believes that education is a key step toward addressing your financial goals, and this discussion serves simply as an informational and educational resource.
Under this special rule, if the additional income tax on early distributions applies to a distribution within this 2-year period, then the rate of additional tax under this special rule is increased from 10 percent to 25 percent.
If one of the exceptions to application of the early distribution tax under section 72(t) applies (for example, for amounts paid after age 59 1/2, after death, or as part of a series of substantially equal payments), the exception also applies to distributions within the 2-year period and the 25-percent additional tax does not apply.
Make sure you follow to the letter the repayment requirements for your loan.