kyounge1956
Thinks s/he gets paid by the post
- Joined
- Sep 11, 2008
- Messages
- 2,171
I've just bought a house for a post retirement residence. I'd like to tap the wisdom of E-R about an idea that just occurred to me. The house needs several thousand dollars' worth of rehab work, more than the amount of cash I have left from the sale. It would be much more convenient to get the majority of the work done before I actually move in, but the only way to do that is probably to take the money out of my retirement account(s). I don't plan to retire from my job until after I have reconstructive surgery, which is scheduled for the end of next April.
As yet, I haven't decided on a move-in date, partly because of this financial pinch, and partly because I will probably be pretty helpless for a couple of weeks after reconstructive surgery. Up until this morning I had only thought of two alternatives: move in earlier and put up with the inconvenience of living in a house under construction, or delay move-in until late next spring, after I retire. It occurred to me today that I could take a loan from my deferred compensation account, have the work done early next year before I retire, and then move in. I need to check with the plan representative, but I believe if such a loan is not paid back by the time I retire, it counts as a distribution, and would be taxed as ordinary income. I don't believe it would be subject to an early withdrawal penalty, because the plan allows withdrawals if you are over 55 at the time of retirement, which I will be. If I wait until after I retire to take the money out, it would also be taxed as ordinary income.
Your thoughts?
As yet, I haven't decided on a move-in date, partly because of this financial pinch, and partly because I will probably be pretty helpless for a couple of weeks after reconstructive surgery. Up until this morning I had only thought of two alternatives: move in earlier and put up with the inconvenience of living in a house under construction, or delay move-in until late next spring, after I retire. It occurred to me today that I could take a loan from my deferred compensation account, have the work done early next year before I retire, and then move in. I need to check with the plan representative, but I believe if such a loan is not paid back by the time I retire, it counts as a distribution, and would be taxed as ordinary income. I don't believe it would be subject to an early withdrawal penalty, because the plan allows withdrawals if you are over 55 at the time of retirement, which I will be. If I wait until after I retire to take the money out, it would also be taxed as ordinary income.
Your thoughts?