How Do You Borrow Money On A Simple IRA Account?
The IRS allows holders of both Traditional and Roth IRAs to borrow from their accounts for up to 60 days without paying the 10% early withdrawal penalty. This is a legally sanctioned loophole in the IRA rollover exception that allows you to transfer funds from a retirement plan into another one without penalties so long as you deposit the check within 60 days. Determine how much money you would like to borrow from your IRA. Create a plan for how you will pay the money back to avoid any penalties. If you fail to deposit the same amount of money into your IRA that you withdrew for the rollover, you will pay a 10% tax fee on that amount, plus it will be added to your gross income for tax purposes. In addition, the IRS will charge a 20% withholding fee. Withdraw the money in your current IRA by requesting a rollover. You don’t have to open a new account immediately. You may even open the same account again with the same provider. You will receive a check in the mail from your IRA provider.
