News for hackers. Stuff that matters.

A comment on Ask HN: What was your best passive income in 2016?. Parent comment

Re:Ask HN: What was your best passive income in 2016? by breckenedge on Sunday December 11, 2016 @01:04PM (#13152198)
You can avoid the 10% tax penalty for early withdrawal for your first home if it's in a Roth IRA, up to $10k. It's not very tax advantaged though.

[1] https://www.irs.gov/publications/p590b/ch02.html

[ Parent | on HN ]
Re:Ask HN: What was your best passive income in 2016? by kobeya on Sunday December 11, 2016 @06:10PM (#13154024)
This is confused.

EVERY contribution you make to a Roth IRA/401k can be pulled out, tax-free, at any time for any reason. It's the earnings you have to be careful about. But for example if you have contributed $20k to your Roth IRA or Roth 401k, and it is now worth $35k, then you can pull out $20k at any time for any reason, while for the other $15k you have to wait until 59 1/2, or use SEP withdraws, etc.

In addition, for a first-time home purchase you can pull out up to $10k without penalty (but with normal income tax applied) from a traditional IRA or 401k.

[ Parent | on HN ]
Re:Ask HN: What was your best passive income in 2016? by closeparen on Sunday December 11, 2016 @02:35PM (#13152708)
$10k is well within the variance of fees and fluctuating interest rates on a home purchase. On the scale of real estate (in and around the cities that have significant tech employment) it's pocket change.
[ Parent | on HN ]