- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Cashing in 401k to put down on a house
Posted on 3/15/13 at 11:09 am
Posted on 3/15/13 at 11:09 am
Fixing to put our house up for sale and want to buy bigger and nicer. Will probably be breaking even on the sale vs what we owe.
So we are thinking about cashing in my old 401k to put down on the new house. (I have a pension now).
Can anyone give me some info on what this is like? I'm hearing 30% is what you'll be deducted.
So we are thinking about cashing in my old 401k to put down on the new house. (I have a pension now).
Can anyone give me some info on what this is like? I'm hearing 30% is what you'll be deducted.
12
Posted on 3/15/13 at 11:21 am to NS Who Dat Nation
Seems like a silly idea to take that much of a tax hit.
Posted on 3/15/13 at 11:34 am to notiger1997
quote:
Seems like a silly idea to take that much of a tax hit.
Posted on 3/15/13 at 11:40 am to NS Who Dat Nation
can't help with details on the penalty, but just thinking of doing that with my own money makes me cringe.
Posted on 3/15/13 at 11:41 am to NS Who Dat Nation
My understanding is that you will pay income tax plus a 10% penalty. If you leave it in the 401k then you will have to pay income tax eventually anyway.
The big concern that I would have is the reason for withdrawal being to buy a bigger nicer house (consumption instead of savings).
In the past I considered cashing out most of my 401k to pursue more attractive investment opportunities. But I didn't want to take the tax hit and did a 401k loan instead.
The big concern that I would have is the reason for withdrawal being to buy a bigger nicer house (consumption instead of savings).
In the past I considered cashing out most of my 401k to pursue more attractive investment opportunities. But I didn't want to take the tax hit and did a 401k loan instead.
Posted on 3/15/13 at 11:45 am to Bayou Tiger
Just got off the phone with ING. Have to take it all or none, so no partial withdrawals.
20% Federal Witholding
10% Penalty
Again I have a Pension that I'll get when I retire.
20% Federal Witholding
10% Penalty
Again I have a Pension that I'll get when I retire.
This post was edited on 3/15/13 at 11:48 am
Posted on 3/15/13 at 11:47 am to NS Who Dat Nation
quote:
20% Federal Witholding
10% Penalty
If you gave me $1000 and I gave you back $700, would you think of this as a good deal for you?
This post was edited on 3/15/13 at 11:48 am
Posted on 3/15/13 at 11:50 am to Will Cover
quote:
If you gave me $1000 and I gave you back $700, would you think of this as a good deal for you?
No one would think that. Only rebuttal I have is that it did go in pretax, so what you are saying isn't exactly accurate.
I haven't contributed to this 401k in 2.5 years and havent really thought about it once. My plan is to stay with this company 30 years and get 99.99% of my 3 highest years.
This post was edited on 3/15/13 at 11:52 am
Posted on 3/15/13 at 11:58 am to NS Who Dat Nation
quote:
My plan is to stay with this company 30 years and get 99.99% of my 3 highest years.
Not sure regarding the details of your pension plan, but how old are you? How far away from retirement are you? What is the realistic likelihood you will be with the company, or that the company is solvent in that time frame?
Posted on 3/15/13 at 12:21 pm to Waffle House
You may owe more than 20% in federal depending on your income for the year. It is counted as income for determining tax bracket. Also, you will have to pay state income tax too. How much are we talking and how much do you make from work? Also, does your spouse work? What is her income?
Posted on 3/15/13 at 12:22 pm to Will Cover
If he needs the money for the house he needs the money... Penalty is just something you gotta deal with.
Posted on 3/15/13 at 12:24 pm to Waffle House
quote:
Not sure regarding the details of your pension plan, but how old are you? How far away from retirement are you? What is the realistic likelihood you will be with the company, or that the company is solvent in that time frame?
would also be leery of pensions. they may increase age required to retire at and time required to gain full pay at retirement. also, staying at the same place 30 years is a HUGE bet....
EDIT: plus interest rates are so low right now its cheap money. i would leave the money in the 401k
This post was edited on 3/15/13 at 12:25 pm
Posted on 3/15/13 at 12:28 pm to TIGRLEE
quote:
If he needs the money for the house he needs the money
But does he "need" the house enought ot take a 30-40% haircut?
Posted on 3/15/13 at 12:42 pm to Janky
Well if he doesn't have the cash in bank to put down and that's the only place he get gt his hands on it... Answer is simple,
Posted on 3/15/13 at 12:49 pm to TIGRLEE
quote:
Fixing to put our house up for sale and want to buy bigger and nicer.
Sounds like he more or less wants a new house, but may not actually "need" a new house.
Posted on 3/15/13 at 12:52 pm to Will Cover
quote:
If you gave me $1000 and I gave you back $700, would you think of this as a good deal for you?
On the surface no. But if he needs the money for liquidity to put into real estate and builds in an area than increases his home value 15% in 3 years, and would not have been able to do so without cashing in 401k, then it's a great deal.
Posted on 3/15/13 at 1:48 pm to NS Who Dat Nation
Really this is just a bet that mortgage rates will rise enough over the next few years to erase the penalty for early withdrawal. The fact that you pay taxes now instead of later isn't as big a deal.
If you are thinking of taking out a significant sum I'd think long and hard about doing this. The penalties could be substantial. OTOH, getting a mortgage now could be much less expensive than getting one in 5-10 years.
Nobody can know exactly what to do here. But generally speaking early withdrawals are a very bad idea.
If you are thinking of taking out a significant sum I'd think long and hard about doing this. The penalties could be substantial. OTOH, getting a mortgage now could be much less expensive than getting one in 5-10 years.
Nobody can know exactly what to do here. But generally speaking early withdrawals are a very bad idea.
Posted on 3/15/13 at 2:58 pm to foshizzle
would you borrow money at 30% interest?
Posted on 3/15/13 at 3:26 pm to NS Who Dat Nation
quote:
My plan is to stay with this company 30 years and get 99.99% of my 3 highest years.
So did everyone at Enron.
Posted on 3/15/13 at 5:00 pm to NS Who Dat Nation
Why not get a bigger mortgage at under 4% than take a 30% penalty. Can't afford a bigger mortgage? It's too much house... Lordy... 
Page 1 of 3
Popular
Back to top
Follow TigerDroppings for LSU Football News