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Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,911 posts, read 58,651,298 times
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No, don't tap 401K for a personal residence. (hint... personal houses are not assets)
Do you have some ROTH money? You can withdraw principle contributions after 24 months (not earnings till age 59.5). This is one reason I and my kids keep BIG ROTHS (and btw... the kids had to pay for their own college, BUT each had $30-50K in ROTH AND they qualified for student loans which they consolidated for 20 yrs at 2.7% (cheap money for college, MUCH cheaper than I could have got).
On the other hand... IF you can find a good cash flowing investment property (10%+) that is priced 30% below current market, then... I would consider using some 401k money to build RE investment portfolio. Again NOT a personal residence, but an ASSET that is returning equity and income. It is VERY cheap to rent in most markets. Might as well have your positive RE investment $$ paying for your own rents. Thus you can choose to live in Paris, Palm Springs, or anywhere else.
Thanks for your unbiased and UN-judgemental reply. It's much appreciated.
Just because I worked on Wall street, doesn't mean I'm a banker or a financial analyst. After raising 3 kids, getting them through college, paying exorbitant NY taxes, commuting expenses, medical there is nothing left for me other than my lousy 401k. I'm not rich or wealthy like you. But thanks for your insight.
Yes, it IS judgmental, but you sort of asked a loaded question. My response is valid. Your comments above indicate just how tight your money is; therefore, you cannot afford to buy a house right now. Saving for retirement is a basic financial responsibility. I'm not sure why this is even a question in your mind. You cannot afford a house.
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