HOME Act would let workers use 401(k) funds to pay mortgage
If this bill passes, it may be very hard to convince certain workers not to dip into their retirement savings when things get tough.
The HOME Act was recently introduced in the House and the Senate. If passed, the bill would allow individuals to make withdrawals from their 401(k) accounts to pay their mortgage – without being hit with a penalty on those withdrawals.
The withdrawal amounts would be capped at $50,000 or one-half of the retirement account’s value, depending on which amount is smaller.
The bill would also require individuals to use retirement funds to make mortgage payments within 120 days of the withdrawal. Deferred income tax on those withdrawals would still need to be paid to the IRS.
We’ll keep you posted.
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