Early IRA Withdrawal
Hi Terry,
In order to avoid having a sale contingency on my new home purchase, I would like to withdraw from my IRA (I am not yet 59-1/2), then replace the money when I sell my current home.
I understand the money must be replaced within 60 days, but what other factors are there to consider with an early withdrawal?
Terry Says
I get it — but don’t do it. You only can keep the money OUT of your IRA for 60 days. And if you don’t return it on time, not only will you pay ordinary income taxes on it, but you will becharged a 10% penalty. AND you will lose all future growth on that money.
Home closings typically take more than 60 days. And if you do close for an all-cash offer, it could take you a lot longer to get a mortgage after closing.
This is a bad idea!
