This bill increases the amount of money that first-time homebuyers can withdraw from their retirement accounts without facing an early withdrawal penalty. Currently, the law allows first-time homebuyers to withdraw up to $10,000 from individual retirement plans like IRAs, and this bill raises that limit to $25,000. The bill also includes an inflation adjustment provision starting in 2025, meaning the $25,000 limit will increase annually to keep pace with rising costs of living, rounded to the nearest $100. The changes take effect on December 31, 2024, and apply to distributions made after that date. This legislation is designed to help first-time homebuyers accumulate funds for down payments and other home purchase expenses by giving them greater access to their retirement savings without penalty.
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