An early withdrawal from our 401k plan was used to buy a home. This is valid to withdraw funds. Can we avoid the 10% penalty for this reason which isn't listed?
cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
New Member

An early withdrawal from our 401k plan was used to buy a home. This is valid to withdraw funds. Can we avoid the 10% penalty for this reason which isn't listed?

We took money out of our 401(k) plan to purchase a home and I don't think we should be penalized to pay the 10% penalty of $4,500. Any way around this?
1 Reply
Highlighted
Alumni

An early withdrawal from our 401k plan was used to buy a home. This is valid to withdraw funds. Can we avoid the 10% penalty for this reason which isn't listed?

No. There is absolutely no way around that. The exception to the early withdrawal penalty for a first time home purchase applies only to an IRA withdrawal. It does not apply to a 401k withdrawal for that purpose. What your fund allows as a reason for withdrawal is totally different than what the IRS allows as an exception to the penalty for early withdrawal.
Privacy Settings