I am 65yr. and retired. Can I use my 401K money to buy a first time home which will be primary tesidence. No t a loan, but down payment or full amount

[princessny1]

I have over 300,000 in 401K

[xmasbaby0 · Accepted solution]

You might be confused because you have heard that folks can use money from an IRA for a down payment on a home without paying an early withdrawal penalty.  That has never been true for a 401k--an early withdrawal from a 401k for a down payment would still incur a penalty.

But you are not making an early withdrawal since you are over 59 1/2, so no worries about a penalty.  But any money you take out of the 401k will be taxable income, no matter what you use it for.  You will receive a 1099R in January which must be entered on your next tax return.

[SweetieJean]

Yes, but it will be taxable for Federal, and perhaps for state.  

There is no penalty (due to your age).

[SweetieJean]

Keep in mind that any increase in income can negatively impact your deductions and credits, make more of your Social Security benefits taxable, and raise your future Medicare premiums.