1 Reply Latest reply on Jan 4, 2016 1:33 PM by Susanna144

    "distribution" repay 60 day rule

    BoBraxton

      Company where I have other investments informed me when I asked about "borrowing against retirement investment."

      To me this seems quite different from borrowing (a loan) and very intriguing.

      The representative told me (two days ago) that when I take out (substantial - a lot)

      from retirement savings investment(s) there begins a 60-day period during which

      (end of which?) I can put the same - total - amount of money back in.

      Not then counted as a Distribution - no tax consequences.

      This is not hypothetical, I have a need for this kind of accomodation -

      more than four years after retiring. Married, so same for spouse.

        • Re: "distribution" repay 60 day rule
          Susanna144

          If you need access to your retirement account, after retiring early, I think you should consider withdrawing the money in substantially equal payments.  That's one of the exceptions to the usual rule that you have to wait until age 59 1/2.  There are some other exceptions - like if you are paying a huge medical bill, then you can take the distribution out without owing a penalty.  I wouldn't borrow against the account for 60 days, because how can you be sure you can pay it all back?  If you didn't pay it back, you'd owe not only income taxes, but a penalty, and also put the rest of your retirement at risk.  The good thing about substantially equal payments is that they go on essentially forever, as long as you need them, and they are likely to be tax-efficient too, each payment is rather modest, and could even be small enough to be tax free.