F It, probably won't make it to retirement. Cashing out retirement to buy a house

[monica214]

@blecap1 I for one think this is a great move! Being in control of your home and surroundings increases your happiness and pride in your home and yourself. And owning a home is key to financial security and independence. It’s one of the steps in the Richest Man in Babylon.

Yes, the money will grow in a 401 k, but you won’t get the utility of the funds for years.

Meanwhile, a smart home investment will also grow equity for you and keep your payment stable so you can plan for your future.

 

[farmboy]

@blecap1 If you have a 403B your employment might make you count as a “good neighbor” sometimes there’s houses on the HUD that good neighbors can get for half the cost. Down side is usually it’s in areas the state determines needs help, but that’ll mean it’ll be cheaper and within your means.

 

[godisgracious24]

@blecap1 Honestly I support this! No one knows how long we will live, rather enjoy it!

 

[smashquest333]

@blecap1 You could have instead worked on building a decent credit score, and applying for a FHA loan, with a super low down payment. I think I plunked down around 6k to get my place. That being said, it’s a terrible time to buy. You should wait it out. I wouldn’t touch that retirement. That is a total 25 year old kid type move there....nobody in their right mind would tell you that’s a good idea...The housing market is about the worst market for buying that I’ve ever seen it in.
Just stick it out. A house is a place to live, just like renting is a place to live. Things will cool off and your situation will probably improve by the time conditions are good to buy.

 

[spiritofselah]

@blecap1 Maybe buy a duplex instead of a house.

 

[john59]

@blecap1 IMPORTANT INFORMATION that a lot of people don’t know about that you should consider.

You can withdraw up to 10,000 from a traditional retirement account and not get hit by the 10% penalty. You will still have to pay income tax on the 10,000.

You could also take a 401k loan and not pay any in taxes or penalty but you will have to pay interest on the loan. Only do this if you know that your able to pay the loan back.

 

[shofarsound]

@blecap1 I'd do the same.

I'm 34 and have 4k in a 401k. That's it.

I don't think I'll make over 45k anytime soon.

 

[dolphinluver]

@blecap1 If you can find a good deal, that 65k can be enough of a down-payment on 2 properties, and on top, depending on your state you won't have to pay property taxes. You can live in one property and lease the other thus turning that investment into a positive cash flow. This is nothing to be sad about my dude, you got this

 

[dolphinluver]

In 30 years when you pay off the properties you'll have 2 fully owned properties and depending on the prices, there's your retirement right there

 

[inconflict]

@blecap1 Income property. Make your house work for you. Get a roommate, fix up the basement into an apartment, turn your garage into your living space and rent out the house.

 

[gallaghermichale]

@blecap1 I generally recommend against this since you’ll owe a good chunk of taxes and then a penalty for when you fill your return. I think you’ll get a 1099-R. Does your plan allow for loans? You can repay it back and pay interest to yourself.

 

[blecap1]

Thanks Everyone, after reading through comments I decided I would just use FHA in combination with a loan from 403(b) to cover costs of buying the home.

Still don't think I'll live to see retirement, but hey at least I'll be in a house that I can afford a payment for.

1800$ for a 2 bedroom apt has been soul crushing (Central US)

 

[resjudicata]

@blecap1 Awful idea. You want to be in a worse financial position? This is how you do it.