Roth IRA withdrawal for first time house purchase

[Naveen Mohan from New York]

I have a client who wants to withdraw money from her Roth IRA to purchase her first home. The problem is right now the money is sitting inn three different employer 401 k account. She wants to roll it over to her Roth IRA and then withdraw money to purchase her house.

My first question is that her contribution to 401-k was Pre tax money and balance is employer matching contribution and earning on the account. Is she even allowed to roll it over to a Roth IRA. If not then does she need to set up a traditional IRA plan and roll it over there?

 

Lastly what portion of can she withdraw without penalty or tax.  Roth IRA is 2 years old

 

thanks

 

Naveen Mohan

 

 

 

 

    

[Abby Normal]

She needs to roll it over to a traditional ira and keep it separate. It's going to be taxable either way, but you can avoid the penalty on 10k for 1st time home buyers. (5329 exception 9)

No reason to run it through a Roth.