If i have 40,000 in an IRA, can I borrow 25,000 from it? Also what is the time frame to pay it back?

Question

If i have 40,000 in an IRA, can I borrow 25,000 from it? Also what is the time frame to pay it back?

Answer 1

you typically can only borrow up to 50% and you may have to pay it back within 5 yrs - check with your plan administrator and if you leave the company before it's paid back, you have to pay back the balance within 30 days or it counts as income and if you're under 59-1/2, there will be a 10% penalty on top of the taxes at tax return time, plus you are paying back pret tax dollars with post tax dollars - so when you finally withdraw that 20,000 in retirement it will have been taxed twice

Answer 2

You can definitely borrow on it, but the best bet is to talk to the Plan Administrator - advice from others will only be educated guesses

Answer 3

401(k), yes.

IRA, no.

However, is it a Roth IRA?  If so, in most cases you can take out your contributions (not the gains) at any time without penalty or taxes.

Answer 4

The question is stated about borrowing $ from an IRA not a 401(k) as last answer assumed. sorry you cannot borrow from a traditional IRA nor can you collateralize the account.