Posted on: 23rd Jul, 2009 03:23 pm
i posted this same question perhaps in the wrong area, so perhaps i have the right place now....
i'm in the process of getting my (first) mortgage modified (about $52,000). i think i'll have to get rid of the second mortgage, so i would use money in my traditional ira account to pay off the second mortgage (about $14,000). this is the first home i have ever owned, and i live in it. are there early-withdrawal penalties for using the ira money for this purpose? would there be lesser penalties if i first convered the traditional ira to a roth ira?
thanks in advance!!
i'm in the process of getting my (first) mortgage modified (about $52,000). i think i'll have to get rid of the second mortgage, so i would use money in my traditional ira account to pay off the second mortgage (about $14,000). this is the first home i have ever owned, and i live in it. are there early-withdrawal penalties for using the ira money for this purpose? would there be lesser penalties if i first convered the traditional ira to a roth ira?
thanks in advance!!
Hi earl!
Welcome to forums!
You won't be responsible for the IRA penalties if you're 59 1/2 years old. If you start withdrawing money before that, you would be responsible for the federal 10% premature withdrawal penalty tax. However, you can withdraw money from Roth IRA which allows tax-free withdrawals of contributions for any reason. But once you've taken out that money, you will not be able to replace it.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
You won't be responsible for the IRA penalties if you're 59 1/2 years old. If you start withdrawing money before that, you would be responsible for the federal 10% premature withdrawal penalty tax. However, you can withdraw money from Roth IRA which allows tax-free withdrawals of contributions for any reason. But once you've taken out that money, you will not be able to replace it.
Feel free to ask if you've further queries.
Sussane