Saturday, April 28, 2012

Strapped for Cash?

Normally it is not recommended to borrow money from your retirement accounts unless you absolutely need to. Tonight on the Suze Orman Show, Suze gave a few ways to borrow from your retirement account if you need cash and have no other source for it.

If you have a Roth IRA you can borrow any of the money that you have personally put into it without penalty or taxes.

If you have converted a traditional IRA or 401K into a Roth IRA, after 5 years you can withdraw any amount of the amount converted without penalties or taxes. Any growth on that amount needs to stay in the account for another 5 years or until you are 59 1/2.

If you have a traditional IRA, you can borrow from it, but it needs to be repaid withn 60 days. So this is only an option if you need cash for the short term.

No comments:

Post a Comment