Caz Nicole wrote:In a somewhat similar situation. Was laid off in November and have a decent enough chunk in my 401k and IRA to put toward a property and looking only at those I could pay for outright with that money. The only painful part is the extra 10% penalty and with the tax draw off of the cash out, reducing the number I have saved by 30% feels painful.
I believe there is a possibility to avoid the penalty at least if you are purchasing a first home and it will be your primary residence. I have purchased a home in the past so not sure I qualify but it's on my list of questions for my lawyer in the coming months.
If you have extra left over even after taking a withdrawal that could pay for the property/house, I would 100% go for that, it still leaves you savings and it also reduces the uncertainty of that particular chunk of cash being lost in whatever market downturn may happen (one always does eventually.) Magical money in a bank made up of 1's and 0's in a computer system seems less stable to me than using that to pay for your property outright and that property has actual tangible value vs a computer bank statement. My 52 cents!
wayne fajkus wrote:Im pretty sure you can take a loan from your retirement account. I did it many years ago. It had to be either for a house or medical expenses.
I paid interest on the loan, but the interest goes back into your account. I basically made money off myself.
It's probably been 20 years and laws change yearly, but it's worth pursuing.