Hi! Has anyone at Microsoft withdrawn 10k from their 401k account with fidelity for a home purchase? This is supposed to be a non-penalized withdrawal. I’m not finding a way to do that online and was looking for advice
Proceed with Rollover/Withdrawal, select Withdrawal, and you should then see the two options for hardship withdrawal or home purchase
Better way is to take a loan from 401k rather than withdrawal. It is a straightforward process and you can repay it back at your convenience. There is an interest component but you are paying that to yourself so should not matter.
If you leave / lose MSFT job you need to pay the loan back to 401k ASAP, keep that in mind
This is different depending on the deatils of each companies plan. I believe Microsoft's plan does not actually require immediate pay back if you leave but be sure to read all of the fine print to be sure.
MS plan does require u to pay it back in 30 days.
I took out money from fidelity as well.. just call them and let them know that you need the money for a home purchase. At the end of the year your tax accountant will need documents from the purchase of the house and year end tax report from fidelity. You will not be penalized but still taxed..
What if I left Microsoft for new job but still have lots of money in 401k with Fidelity? Can I sill borrow it from there for home purchase?
The amount of money you have in your 401k may change from when you still work there and when you leaving. That is all dependent on your vesting policy. If you’re still working there then you can borrow and pay back. Or withdraw for down payment. ... once you leave will need to withdraw.. pay taxes but not the penalty
And you probably cannot contribute into the 401k while your loan from it is outstanding I guess?
False. You can make any contributions you want, as long as you make the min loan payment.
Withdrawals from 401k for primary residence are not penalized by Fidelity but by IRS. True story
This is true because you are paying back pretax dollars with after tax dollars.
You can take a loan against 401k. Since you will be borrowing money from yourself, you will be paying yourself back. Also 401k loans for home purchase are long term loans. So you have like 15 yrs to pay back.
no 10% penalty, but taxed as income. and it's gonna cover a month's mortgage at best. 😂
Call your 401k broker bro