My wife and I are in the process of refinancing on our house and need to show about $5K more cash in my checking account than we have available.
I also starting working for a new company earlier this year and they match 50% of percent of 401K contributions (into the ESOP program). In order to maximize the employer's contributions I need to contribute an additional $6600 into my 401K (the company will match $3300 of this). I plan to withdraw this $6600 from my Fidelity IRA (rollovers from previous 401K's) and then have the company withhold $1320 for 5 weeks from my pay check. I will obviously pay tax
on the early distribution
, but this will be offset by the tax I won't have to pay on the payroll reduction of $6600. From what I understand, there will be a 10% penalty (is this correct?) for early distribution (so it costs me $660, to get $3,300 from the company), and satisfies the cash requirement for the refinance
From what I understand, if I contribute that $6600 to a retirement plan
within 60 days, I can avoid the penalty and the tax?. If I have the distribution made to me, deposit in my checking account, and can show contributions to my 401K of $6600 within 60 days of the distribution from the IRA, will I avoid the penalty?