Brett Samuels (Bloomberg Law): Trump’s 401(k) Home Buyer Idea Requires Retirement Rule Shifts

A forthcoming White House proposal would allow use of 401(k)s for down payments on home purchases, meaning shifts in long-held regulations on plan withdrawals, and possibly new legislation.

President Donald Trump is expected to unveil the plan the week of Jan. 19 at the World Economic Forum in Davos, Switzerland, National Economic Council Director Kevin Hassett said Friday.

Withdrawing funds from a retirement account to pay for a home is a new policy idea that would stretch beyond the statute and accompanying regulations’ usual bounds, with current rules imposing a 10% penalty for early withdrawals.

The administration’s plan may require legislation, with experts saying it could be accomplished through a larger legislative package focused on retirement benefits, but getting bipartisan support could be difficult.