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  • msf June 2016
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Q&A With Scott Burns: Some IRA Withdrawals Can Cost More Than Others

TedTed
in Off-Topic
FYI: Q: My wife and I are retired. We recently purchased a condo with the proceeds of our previous house, plus $43,000 from my IRA. I must pay back the $43,000 to the IRA within 90 days or it will be considered a permanent distribution for tax purposes.

I am trying to decide whether to accept the distribution or repay the IRA with funds from my variable home equity line of credit. The interest rate is 3 percent, or a payment of $182 a month for 30 years.
Regards,
Ted
https://assetbuilder.com/knowledge-center/articles/some-ira-withdrawals-can-cost-more-than-others

Comments

  • msf
    AFAIK, the only rule that allows a short term "loan" from an IRA is the 60 (not 90) day rollover rule. Strange that wasn't mentioned in the "A" to the "Q".

    Not suggested in the response was a suggestion to project out the impact on future RMDs of taking the money out now. That is, taking the money now might be trading a one-time tax hit for a lower tax rate later on. Not too likely, but the numbers matter.
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