Did you know that there are a lot of options where you may want to go ahead and consider taking money out from your retirement funds? Here are some cases that you may be able to consider it.
- Medical expenses. If unreimbursed medical expenses from somewhere like the emergency room Houston are more than 7.5% of your gross income or you’re unemployed, you may be able to use your IRA to provide for both of those things.
- 60-day loans. The IRA is easier to take out of than the 401k. This is one of the reasons; you can take out a 60-day interest and penalty-free loan. Now, it must be paid back by the end of those 60 days, or you can get some big penalties slapped on you.
- First home and education. You can take up to $10k out when you buy your first home (Down payment, anyone?). Also, you, your spouse, your kids and/or grandkids can get some education funds for tuition, books, and/or room and board from your IRA.
- Medical expenses. Like IRA’s, you can take out money for medical expenses, the same 7.5% rule applies.
- Military reservists called to duty. If you’re in the military and called to duty for 6 months or more, you could possibly qualify for early retirement, thus being able to tap into your 401k early and without penalty.
- “Separating from service” This is a bit finicky. If you are fired, quit, or laid off from a job at 55 or older (50 or older for public safety officers, like policemen, firefighters, and the like), you may be able to start retirement after that. There are special cases for this “early retirement” where the government defines exactly what you can get and when, but if you are an adult in this age gap, you may get rewarded for staying out of the already volatile job market with an early retirement.