Cashing in your 401k
My 73 year old husband wants to buy another home that will be our primary residence and later selling our already paid off current home (it will take us about 6 months to a year to move everything) is tapping into my 401k (now @ about $350k) for $300k to purchase home be a wise decision in reference to taxes and adjustment income level ? Our current home probably will sell at about $125k
Terry Says
Gosh, that’s tough. First of all, is he retired? If so, why wasn’t that money rolled over to an IRA?
Second of all, that withdrawal will be considered ordinary income — not only will you pay taxes on it, but it will definitely impact your Medicare Part B and D premiums for years to come!
And if you wait too long to sell, you could lose your $500,000 exemption, since you have to have lived in your primary residence for the past two years of the past five to get that tax break.
And if he passes on ahead of you, you won’t have your OWN retirement savings!
This gets a big “thumbs down” from me!
