Will I incur a tax penalty for using my 401(k) funds to buy real estate in a country outside the U.S.?

I'm 60 years old. I plan to retire in five years, and expect to have approximately $400,000 in my company 401(k) at that time. Is there a way to take a cash portion of the 401(k) and buy real estate in Costa Rica? Will I incur some kind of tax penalty? 

Retirement, 401(k), Real Estate
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November 2017
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You won't technically have a penalty for taking money out of your 401K- but you will be penalized on your tax rate.

 

If you are over 59.5 (you are) you won't be subject to the 10% IRS penalty for early withdrawals from your 401k.

 

That being said- if you take large withdrawal from your 401k you will end up paying more taxes on those withdrawals.  Essentially inflicting a tax penalty on yourself. 

 

Sounds like you could benefit from sitting down with a fee-only fiduciary financial planner to map out how to get your to Costa Rica - with minimum taxes paid on your 401k- and MORE IMPORTANLTY how to fund you retirement so you don't run out of money.

November 2017
November 2017