General Question

tia29's avatar

Can you borrow from an IRA?

Asked by tia29 (189points) June 18th, 2008 from iPhone

I’m about to leave my current job and have decided to roll my Thrift Savings Plan (gov’t) over into an IRA. I can borrow from the tsp and then pay back the loan over time. Can you do that with a traditional IRA?

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6 Answers

reed's avatar

I believe it depends on your IRA plan administrator but I don’t think there is a statutory rule against it. I borrowed from my IRA many years ago for a down payment on a house. Check with your plan administrator to be sure.

tia29's avatar

thanks reed

marinelife's avatar

Many plans allow it, but it is not advisable on a routine basis. It may also have tax implications so you should check carefully.

osullivanbr's avatar

Frightened the life out of me there. For an Irish person at first glance, that question means something entirely different.

marinelife's avatar

@osullivanbr I just bet! You gave me a chuckle, although I am aware the historical situation was not funny.

Wealthadvisor's avatar

This is an old question, but you can not make a loan from an IRA. You can make withdrawals. And, for a first time home buyer, you can make a withdrawal of up to $10,000 with no early withdrawal penalty of 10%. But, you do have to pay tax on the money.

You can only make loans from a 401(k) as long as your plan allows loans.

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