Withdrawing from a traditional IRA

[Scallywag]

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

[TexasHusker]

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.

[Scallywag]

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.

[TexasHusker]

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.

[LivingAlmostLarge]

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