Q: Can I cash out my IRA’s to put down on a house? —Pete P., Portland, Ore.
- Derek Hough Hints About Sister Julianne's Wedding Plans: 'Something Outdoors, in Nature'
- Inside One Gay Couple’s Journey to Fatherhood - And Why Their Surrogate Wants to Fulfill Their Dream of Parenthood
- Is Kanye West Really Running for President in 2020? The Kardashians Rally Their Fans on Social Media
- Boyfriend of Slain Anchor Alison Parker Reveals Her Happy Last Months: 'I Believe God Knew She Was Going to Be Taken'
- Miley Cyrus Closes Out MTV VMAs with Drag Queen-Packed Performance and New, Free Album
A: You can, but there are a few hoops you have to jump through to keep the IRS happy.
First of all, you can only do this if you’re a “first time” home buyer. (In IRS-speak, that means you haven’t owned a home in two years. If you’re married, same goes for your wife.)
Next, you can only use $10,000 of IRA savings. If you’re married and your wife has an IRA, she can use another $10,000 from her savings. You also have to use the money within 6 months of withdrawing it. And you can do this only once.
Oh, and you’ll have to pay taxes on any gains form the investments that were held in the IRA.
If you don’t meet these criteria, or you want to withdraw more than $10,000, you can still use the money. But you’ll have to pay a 10 percent penalty for “early withdrawal.” For more information refer to Publication 590, page 29. (It’s a pdf file, so make sure you have Acrobat reader before downloading.)
© 2013 msnbc.com Reprints