Tuesday, November 18, 2014

Early Distribution from 403(b)



A reader sent in this question:

Hello George – I have been trying to get to bottom of a question in layman's terms involving 403(b) and real-estate investment.

My wife and I have a 403(b) and would like to buy a condo in So FL. Can we do so using the 403(b) without penalties and/or taxes etc. We not at retirement age yet; 59 for me and 55 for her.

Please advise... Thank you very much for your time... S.D.

And my reply: 

Hi S.D, 

Generally if you withdraw money from a 403(b) plan you will pay ordinary income tax on the distribution. On top of that, if you are under 59½ you will face a 10% penalty. 

A retirement plan may, but is not required to, provide for hardship distributions. Many plans that provide for elective deferrals provide for hardship distributions. Thus, your 403(b) plans may permit hardship distributions.

If it does allow early withdrawals, it must provide the specific rules used to determine the hardship.
For example, a plan may provide that a distribution can be made only for medical or funeral expenses, but not for the purchase of a principal residence or for payment of tuition and education expenses.

I suggest you check with your plan’s administrator to see if there is a provision for buying a home. Usually, though, when such a provision exists, it is only for the first-time purchase of a primary residence — not a vacation or rental property.

You can read more about withdrawals from retirement plans here: http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Hardship-Distributions

So if I were you, I would not take this money out of your 403(b).

Have you looked into getting a mortgage? With interest rates extremely low, you might consider it.

Good luck,

George

Sunday, November 16, 2014

Looming Crisis for Elderly and Their Caregivers



A must-read article in today’s Pittsburgh Post-Gazette on the alarming reality facing aging baby boomers: There will not be enough caregivers – from family members or professionals – to accommodate the 70 percent of baby boomers that the Department of Aging estimates will require long-term care.

http://www.post-gazette.com/image/2014/11/14/20141116caregiver-support-ratio600-png

Saturday, November 8, 2014

How to Find In-Home Care



This PBS story gives a good overview of options you might consider if you need to find help caring for a parent or spouse. 



Tuesday, October 21, 2014

Sunday, October 19, 2014

REIT portfolio update ...



Here is the latest update on the e-financial REIT portfolio: 



Best wishes, 

George