I’m 63 and still working. Can I use some of my 401(k) on my next home to defer some of the cost? Would I have to pay taxes on what I pull out?
Since you are over 59 years old, no early distribution penalty applies for taking an in-service distribution from the 401(k) account. However, the amount taken as a distribution is includible in taxable income in the year the distribution is made, regardless of the use of the money. So, yes, you will have to pay taxes on what is taken out of the plan.
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Answered by: Ibolya Balog, CPA, is an associate professor at Cedar Crest College in Allentown, Pa.