Thanks for the info.

I think what I will do is as follows: I'm terminally ill and
my doc believes I'll pass away within 2 years. But there's
some good news in that! I can now withdraw 50% of a term
life insurace policy I have w my employer that is valued at
3X my current salary. And it's non-taxable. It will mean
less $$ later on for my wife, but my pension will kick in
then + her & my SS. With the life ins $$ we can pay for half
the price of a house and that would lower her mortgage
payments. At that point she will have to support only
herself.

Whatya think?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

46erjoe wrote:

- quote -

If she is "totally and permanently disabled" she can make
withdrawals from her 401K plan account without the 10%
penalty tax. Buying a house is not an exception, however
that would be moot.

Will some/all of it be taxable?
Any and all withdrawals are taxable as ordinary income.

- quote -

Unless you have other sources of retirement funds to draw
from, whatever you do will cause some hardship. At your
ages, retirement could last 20-25 years or more. Is buying
a house (at this time) a good use of those funds?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

My wife has $60K in a 401k account earned while she was
working for an agency she quit working for over 10 years
ago. She is now 55 years old and was declared 100% disabled
a few years ago and collects SS. I am 58 and will be
retiring soon, also with 100% disability.

We need to buy a house in which to live since the one we are
living in now is provided by my employer.

Can we use her 401k towards the house purchase and will she
have to pay a penalty. Will some/all of it be taxable?

Should we do everything possible to keep from tapping that
money? We do have some other options, but they would make
for a severe hardship.

Any tips would be welcomed. Thanks.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >