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Withdrawing from a traditional IRA

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    Withdrawing from a traditional IRA

    I have a traditional IRA from a 401K in a previous lifetime. It has apparently lost 20K this year. As I understand it, the stimulus bill forgives the 10% penalty, and then I can pay the taxes due over a 3 year period? Am I missing / misunderstanding anything here?

    Yes, this is "taking away from retirement" but the funds would help with downpayment on a home (which is my absolute priority). But i am concerned that I may be missing something here with regards to penalty free withdrawals on the traditional IRA at this time. Please advise

    #2
    Wow that's pretty sweet if true! I withdrew all of mine- $400K - to buy a couple of vacation rentals. But after all of the taxes and penalty I was left with $260K. yikes.

    But...the rentals have produced around $300K in revenue and have appreciated about $100K so it's all good.
    Never underestimate the power of stupid people in large groups.

    -George Carlin

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      #3
      Originally posted by TexasHusker View Post
      Wow that's pretty sweet if true! I withdrew all of mine- $400K - to buy a couple of vacation rentals. But after all of the taxes and penalty I was left with $260K. yikes.

      But...the rentals have produced around $300K in revenue and have appreciated about $100K so it's all good.
      Wow cool. But I need the money and will have to "eat" the taxes as this will be our primary residence. My only concern is what if I misunderstanding something? Not having to pay the 10% penalties sounds like an awesome "deal", even if taxes take a good bite out of the pot. It will save us a whole year and move us into a house faster.

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        #4
        Originally posted by Scallywag View Post

        Wow cool. But I need the money and will have to "eat" the taxes as this will be our primary residence. My only concern is what if I misunderstanding something? Not having to pay the 10% penalties sounds like an awesome "deal", even if taxes take a good bite out of the pot. It will save us a whole year and move us into a house faster.
        I haven't heard that, but it sure sounds like it is worth checking into further. I bet your banker knows if this is all legit, as well as the rules.
        Never underestimate the power of stupid people in large groups.

        -George Carlin

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          #5
          but housing prices could also crater this year. Or job loss. it's a weird time.
          LivingAlmostLarge Blog

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