Posts Tagged ‘Loans’
Can I use 401k Hardship Withdrawal if I have money in the bank?
checkster2005 asked:
I would like to buy a house, say for 100K. I want to put 20% down and I do have 20K in my checking account. But I would rather take 26K (20K minus tax and penalties) out of my 401K even if I can afford it.
I would like to buy a house, say for 100K. I want to put 20% down and I do have 20K in my checking account. But I would rather take 26K (20K minus tax and penalties) out of my 401K even if I can afford it.
JPMorgan and IRS say I can take out (Not borrow, you don’t have to pay it back) money out of my 401K under the Hardship Withdrawal for the downpayment only. Will I qualify since I could afford the 20K downpayment with my checking account? In other words, must I legally pay off my downpayment with my cash at hand before dipping into my 401k?
I can’t find any of these details online. I already know all the pitfalls of a Hardship Withdrawal versus loans etc.
Great answer Ryan M. You mention a 10% penalty off the bat…where does that come from? I called JPMorgan and they said there is no penalty under my plan. Just taxes



