Give me a minute to look something up for you
let me know if you need more info from me...
Are you there?
OK, if you take the money out before you are 55, you have to pay the penalty. You could roll it into an IRA, and then take up to $10,000 for the purchase of the home.
If you are married, both you and your spouse can not have had an interest in a primary residense for the two years prior to the purchase date.
The rollover IRA company (Vanguard) just told me if I will pay a penalty on any funds withdrawn until I'm 59 1/2.
Vanguard also mentioned a 72(t) exception, but it seems to apply more to regular distributions than lump sum, so I can't see how it applies to me. Do you think it may apply?
When you take the withdrawal, they will code it as an early distribution on your 1099-R. You can then use form 5329 to claim the exclusion to the penalty of up to $10,000 toward the purchase of your home.
I have not heard of that specific exception.
So, I could take $20k, use form 5329 to claim an exception for $10k, and pay the 10% penalty on the remaining $10k?
Yes, that is correct.
There's no way to wait on the 401k distribution until you are 55?
Can I leave the funds in my old 401k account for another 6 months, if my old employer doesn't object? are there rules about moving the money out once you've left a job?
Each plan has its own rules. Some companies don't require a distribution after separation from service. Ask your administrator if it can be delayed.
I will have to check if you must separate from service after 55 to qualify. be right back.
It sounds like you must separate from service in the year you reach 55, so that won't apply to you.
ok - still can save $1k with the 5329 - so, thanks. bye