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Message
re: Cashing in 401k to put down on a house
Posted on 3/16/13 at 4:57 pm to slackster
Posted on 3/16/13 at 4:57 pm to slackster
quote:
Emergency fund is a plus, but that is far more of a down payment than you need unless you are building your house, in which case its usually required.
Thought you had to pay PMI if you didn't put 20% down?
1
Posted on 3/16/13 at 5:08 pm to slackster
quote:You seem to have a good vision of the tax regime when you retire. But being 20-30 years away myself, I have absolutely no idea whether this will be the case, especially with the continued acceleration of deficit spending.
some people are throwing that around as if paying taxes now and paying them in retirement are the exact same. In the vast majority of cases, your tax bracket tends to be significantly lower when you are retired
In addition, I don't know when/if the amount of money that I have saved in tax-deferred retirement accounts will reduce or eliminate my eligibility for social security benefits.
I definitely contribute enough to get the 401k employer match, but it just doesn't bother me to hedge my political risk and have a mix of long-term savings both inside of and outside of "official retirement accounts."
Posted on 3/16/13 at 5:14 pm to slackster
quote:
$100k will be worth $1,006,265 in thirty years assuming 8% annual returns.
$65,000 towards a house, assuming 5% annual growth (national average in housing)' would be worth $280,926.
Which one of those makes more sense?
I don't know if this post was intended for me, but if it was... did you read what I wrote?
quote:
That way, your money continues to grow until you reach the actual retirement age. Once you retire, you're not going to have to pay the penalty and you're going to be in a lower tax bracket than you are now. That means more money for you
Posted on 3/16/13 at 7:44 pm to Powerman
quote:
Thought you had to pay PMI if you didn't put 20% down?
Lenders are offering lender paid MI for 1/8 percent rate hike.
Posted on 3/16/13 at 8:09 pm to NS Who Dat Nation
How much are we talking?
Posted on 3/16/13 at 9:01 pm to C
See if there are any tax breaks for buying the home (including rolling over the withdrawal into the home purchase). That might erase the penalty. We'd need a tax expert to let us know for sure.
Posted on 3/17/13 at 5:59 pm to slackster
Can you borrow the money from your 401k? I have done that in the past, but was able to pay it back. There is no penalty if you pay it back, however, there is a time period that is relatively short.
Posted on 3/18/13 at 8:19 pm to NS Who Dat Nation
Do not touch the 401k!
1) Trust me, you no idea whether or not you will work in the same place for 30 years!!
2) Home mortgage interest rates are the lowest in 40+ years. It's cheap money so take a 20-30 year loan.
3) let it build up into a nice lump sum nest egg. Even if you do earn an pension it is a monthly payout and will not support a large single purchase later in life
4) max out your pretax contribution and get every $ of matching company $'s you are eligible for. It's likely 50 cents on the dollar on the first 4-6% and great return on your money
Believe me on this one.
1) Trust me, you no idea whether or not you will work in the same place for 30 years!!
2) Home mortgage interest rates are the lowest in 40+ years. It's cheap money so take a 20-30 year loan.
3) let it build up into a nice lump sum nest egg. Even if you do earn an pension it is a monthly payout and will not support a large single purchase later in life
4) max out your pretax contribution and get every $ of matching company $'s you are eligible for. It's likely 50 cents on the dollar on the first 4-6% and great return on your money
Believe me on this one.
Posted on 3/18/13 at 9:15 pm to Bayou Tiger
quote:
You seem to have a good vision of the tax regime when you retire. But being 20-30 years away myself, I have absolutely no idea whether this will be the case, especially with the continued acceleration of deficit spending.
Of course I don't know what taxes will be, but historically they haven't strayed radically in the past.
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