Posted on: 03rd Apr, 2009 12:36 pm
Hello,
Is it possible for me to use 401K/IRA funds to pay off my mortgage, vacate the property and rent out the house while rolling rental money back into my retirement account without incurring any penalties? I am 51 yrs old.
Thanks, Tim D.
Is it possible for me to use 401K/IRA funds to pay off my mortgage, vacate the property and rent out the house while rolling rental money back into my retirement account without incurring any penalties? I am 51 yrs old.
Thanks, Tim D.
Hi
As far as I'm aware of, if you withdraw from 401k before you turn 59, you're required to pay a considerable amount of excise tax, penalty tax etc on the amount withdrawn. Instead, I think you can take a loan from your 401k account to pay off the outstanding balance on mortgage. Once the mortgage is paid off you can rent the house and pay the money back to the 401k along with the interest.
As far as I'm aware of, if you withdraw from 401k before you turn 59, you're required to pay a considerable amount of excise tax, penalty tax etc on the amount withdrawn. Instead, I think you can take a loan from your 401k account to pay off the outstanding balance on mortgage. Once the mortgage is paid off you can rent the house and pay the money back to the 401k along with the interest.