First, lets look at the changes.
The usual 10% penalty is waived.
You have until the end of the year to do this.
If you replace the money within three years, you dont have to pay income tax on the amount.
Otherwise, you have three years to pay the taxes on that money.
(You cant take a loan from your IRA.)
This option is only available for 180 days after bill passed on March 27so, the end of September.
Typically, you cant withdraw more than half your balance, but thats suspended during this period.
Whos eligible for a penalty-free early distribution?
Its available to most people.
$100,000 is a lot, Morrison warned.
You could potentially liquidate your entire 401(k), she said.
The market is down and its been really bumpy, Morrison said.
Start with small amounts, and if you need more, take more out later, she said.
But Morrison warned that you could be a the greatest disadvantage.
That return will be very difficult for you to get back to.
Take a look at some quick math on this.
Thats a nice nearly $604,000.
But say you started that account, then wiped it out back to $0 when youre 29.
The following year, you start saving again.
You only lost five years of progress, right?
That might be a cash-equivalent IRA or a money market account.
Hold it in a savings account and put it aside, Morrison said.
It always pays to have a second set of eyes, Soriano said.
