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Originally Posted by bjkrukowski =======>I guess the new home will NOT be your primary residency unless you sell the current home. (No I am transferring my existing 2-family to an LLC as a rental the new home will be the primary (owned by my wife) the current will be an income property)
My pension is defined benefit plan. I get 64% of my highest 3 years if I work 32 years and have a combined age and years of service at time of retirement of 85.
So there is a 10% penalty plus I need to pay income tax.
That penalty is still significantly less than the additional interest I will pay by waiting 1 year (assuming the Fed is going to raise rates) |
(No I am transferring my existing 2-family to an LLC as a rental the new home will be the primary (owned by my wife) the current will be an income property)
=======>>Ok I see sorry my bad;as you can see, principal residence is the home in which a person lives most of the time, whether he owns it or rents it.
My pension is defined benefit plan. I get 64% of my highest 3 years if I work 32 years and have a combined age and years of service at time of retirement of 85.=>Sorry, I do not know much about it as I am not a retirement plan expert; however,one of the two Employer-based plans is defined benefit plan that is An employer-sponsored retirement plan where your retirement benefits are sorted out based on a formula using factors , i.e., salary history and duration of employment or your age or etc.the plan ,UNLIKE defined contr plan, provide a fixed, pre-established benefit for employees at retirement. In general, you hardly fork over any of your paycheck to participate in a defined benefit plan, but your employer does
So there is a 10% penalty plus I need to pay income tax. =========>>>as you can see, cashing out or withdrawing from the R-IRA, I f you have the acct, is probably the best choice since R-IRA contributions are made after-tax monies,so, as you've already paid some of the tax. However, ASLONGAS you cash out an individual retirement plan such as a traditional IRA, you'll have to pay reg income taxes to IRS/ your state on all of your withdrawal, which could be substantial if the withdrawal is large. In both cases, you'll be subject to a 10 % early withdrawal penalty if you are younger than age 59 1/2.If you withdraw from yoru 401K plan, then, You will ALSO owe income tax on the amount you withdraw, just as you would had you withdrawn it in retirement. Remember, income taxes are due on all retirement plan distributions at any age, even hardship distributions(for medical purposes or etc) reported on Form 1099-R..
That penalty is still significantly less than the additional interest I will pay by waiting 1 year (assuming the Fed is going to raise rates)=====> Perhaps butI guess Hard to see if the Fed’d raise discount rate in the near future. No idea.