I have never owned a home and want to build one. The builder requires some money twice. Can I take money out of my retirement accounts twice, without penalty?

I am 58. I live in California and the home will be built in Texas. I will put 10K down (earnest) from my savings. Then, 30 days later, approximately $34K is due to the builder. Then, at closing, the remainder of 20% down is due. I need to take the 34K and the remainder of the 20% from my retirement accounts. I have heard that I can take money out for the down payment of my first home. But, can I take money out twice, without penalty (and have the money go to different parties if they are both for my first home)?

525

Expert Alumni

Mar 22, 2021 10:02:40 AM

It depends whether your retirement account is a 401(k) or an IRA.

If it is a 401(k0 then there is no exception to the early withdrawal penalty for the purchase of a home.

If it is an IRA, there is an exception to the penalty of the purchase of a first home but this exception is limited to $10,000. The number of withdrawals or parties is not irrelevant but the exception is limited to $10,000.

Please read this TurboTax Help topic for more distribution.

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I have never owned a home and want to build one. The builder requires some money twice. Can I take money out of my retirement accounts twice, without penalty?