Buying your first home

Question

Apparently you are allowed to withdraw up to $10,000 without a tax penalty from a retirement account as long as it goes to a first home purchase. So could you wait till your retirement account reaches $10,000, then take out the money, and then close the account for good?

Answer 1

That doesn't sound like a very smart idea to me. Maybe you should rethink that one.

Answer 2

As I understand it, you can use the retirement money for a home purchase, but it is required to be paid back to the retirement account if you ever sell the home.  It's kind of like a loan to yourself.

Answer 3

No you can borrower it from the retirement acct but will have to pay it back. A payment plan will be made at the time you withdraw the money. If you take the money and closeout the acct you will be penalized and have to pay taxes on it.