tag:blogger.com,1999:blog-21976303.post4066277047393732669..comments2024-03-24T05:22:27.179-04:00Comments on Orthonomics: Hurricane Sandy Hardship WithdrawalsOrthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-21976303.post-47693561608809855872012-12-09T02:30:37.973-05:002012-12-09T02:30:37.973-05:00Withdrawals from a Roth IRA are tax-free because y...Withdrawals from a Roth IRA are tax-free because you put post-tax money into them. You already paid income taxes on that money.Abacaxi Mamoahttp://abacaximamao.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-21976303.post-52252293197609252452012-11-25T21:47:07.607-05:002012-11-25T21:47:07.607-05:00Yes, previous contributions to your Roth IRA may b...Yes, previous contributions to your Roth IRA may be withdrawn without any tax or penalty.Markhttps://www.blogger.com/profile/05760733574758883958noreply@blogger.comtag:blogger.com,1999:blog-21976303.post-27617175511680989512012-11-25T21:37:30.231-05:002012-11-25T21:37:30.231-05:00I've heard that the principal in a Roth IRA ca...I've heard that the principal in a Roth IRA can be withdrawn tax free and w/o a penalty.<br /><br />Is that right?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-21976303.post-24625076939149885182012-11-25T13:09:19.243-05:002012-11-25T13:09:19.243-05:00Dave's right. I was concerned about the situat...Dave's right. I was concerned about the situation if you lost or changed jobs during the life of the loan (which might be more likely due to the Hurricane).Conservative scifinoreply@blogger.comtag:blogger.com,1999:blog-21976303.post-49633476578643611672012-11-24T23:21:44.950-05:002012-11-24T23:21:44.950-05:00Borrowing from a 401k does not get you the 10% pen...Borrowing from a 401k does not get you the 10% penalty, or income tax penalty.<br /><br />Failure to repay it (which yes, you have to do in full if you change jobs), would be subject to that penalty (which would be taken from the remainder of your 401k, if I recall correctly).Davehttps://www.blogger.com/profile/04391023891253673160noreply@blogger.comtag:blogger.com,1999:blog-21976303.post-21957946558003815702012-11-24T21:41:26.093-05:002012-11-24T21:41:26.093-05:00I would NOT recommend taking a loan from a retirem...I would NOT recommend taking a loan from a retirement account for this reason (or almost any reason). FEMA offers loans (and even grants), and the loans can have interest rates as low as 1.68% (which is effectively almost free). <br /><br />If you borrow from your retirement account, you will pay a 10% penalty on money which will also be subject to ordinary income tax. You will then have to repay it over the next few years with AFTER-TAX money and if the market goes up, you'll miss out (though you might avoid a decline). Also, if heaven forbid you lose your job, you might have to pay the entire sum back in lump sum form. Also, while the money is in a retirement plan, it is substantially shielded from bankruptcy, spousal debt, etc., but once you remove the money, it can be grabbed if you owe such debts.Conservative scifinoreply@blogger.comtag:blogger.com,1999:blog-21976303.post-15822070256024222612012-11-22T20:10:21.709-05:002012-11-22T20:10:21.709-05:00I wonder if taking a loan from the 401k is a bette...I wonder if taking a loan from the 401k is a better option? I'm surprised that they aren't relaxing the 10% penalty in this case.<br /><br />Also, they may be some low interest loans available via FEMA (sometimes via SBA for some odd reason) that are generally worthwhile because they are very low interest and usually don't and the associated paperwork.Markhttps://www.blogger.com/profile/05760733574758883958noreply@blogger.comtag:blogger.com,1999:blog-21976303.post-84962784019387920292012-11-21T23:15:44.237-05:002012-11-21T23:15:44.237-05:00Taking a 10% hit and setting back retirement plann...Taking a 10% hit and setting back retirement planning certainly makes better financial sense than going into debt by putting things on a credit card at 17% interest. But can I assume you would only recommend this approach for people who have major property damage and need to supplement FEMA and insurance payments? I suspect you would agree that Sandy should not be used as an excuse to withdraw retirement money to make a big wedding, visit relatives in Israel or buy [insert your particular community's "necessity" here].Avi Greengarthttps://www.blogger.com/profile/14267040237664555562noreply@blogger.comtag:blogger.com,1999:blog-21976303.post-18115167916682324572012-11-21T23:12:07.290-05:002012-11-21T23:12:07.290-05:00This comment has been removed by the author.Avi Greengarthttps://www.blogger.com/profile/14267040237664555562noreply@blogger.comtag:blogger.com,1999:blog-21976303.post-47566334228740871532012-11-21T21:06:41.347-05:002012-11-21T21:06:41.347-05:00I am happy to see that Orthonomics has returned; i...I am happy to see that Orthonomics has returned; it is one of the most important blogs for Orthodox Jews.Mr. Cohenhttp://groups.yahoo.com/group/DerechEmet/noreply@blogger.com