Question about pension money and real estate?
My husband recently left a job with a city police department for a state one. His new department recognizes his time served, and he does not have to contribute to the new pension system. Previously, he had, and is now entitled to get his other money back, after taxes and a penalty for pulling it out early of course. We were looking to use the pension money as a down payment on a home. My question is; is their some way to avoid any of the penalties usually involved with withdrawing pension money early, since the money is being deposited directly for a real estate down payment? There was mention of State and Federal taxes that would be owed as the money was invested pre-tax, and an additional 20% penalty because of out age (early 30's.) Any help would be appreciated. Thanks! By the way, this is in New York State, if that helps.
Public Comments
- Simple answer: Probably not. The only way to avoid paying hefty taxes on that money is to roll it over into a 401k plan.
- Check with the pension adminsitrator on the rules for that. Many times you can use money from retirement accounts (like 401Ks etc..) for the purchase of a Primary residence for first time buyers. (First time buyers , in most cases just means that you havent owned a home for two years).
- I just went to an IRA and 401K seminar in Concord this weekend...they were talking about this such topic..my notes aren't the best..but, you should contact the American Pension Services https://www.aps-utah.com no, I do not work for them and I do not get anything from it...they just seem to be cheaper and more up to date on things.
