AboutDavid M Iannopollo Expertise I am a professional financial advisor who can assist you with answers on mutual funds, annuities, IRA's, rollovers, qualified and non-qualified retirement plans, retirement planning, educational planning, life, disability and LTC insurances.
Experience I have over 20 years experience in the business and financial world.
I have an old 401k from my previous employer (around 15k)and I am in the process of rolling that over into an IRA (I have a new 401k with my current employer). My question is, can I use the entire amount from my old 401k (once I roll it over into an IRA) to purchase my first home without any paying additional penalties? I heard that the cap is only $10,000 and I avoid the 10% penalty when I do that. Also, if I can only take out $10,000, can I rollover whatever is left in the IRA into my current 401k and avoid additional penalties?
Answer Hi Ed,
Yes, you can rollover the 401k into an IRA and then take the $10k from the IRA and leave the rest in there. The cap is 10% and you can avoid the 10% penalty. You will, however, be taxed as ordinary income on any amount withdrawn.
