Advise: Sell off the 401k to pay for the house?

[dannno]

Is it worth it?

The person is close to retirement age.

 

[yongrel]

Asking the internet for advice on serious subjects is almost always a bad idea.

 

[dannno]

Asking the internet for advice on serious subjects is almost always a bad idea.

I think it depends on how serious the person asking for advise plans to take the responses.

 

[ItsTime]

I would always take a house over a 401k

 

[Mister Grieves]

I would always take a house over a 401k

No doubt about it.

 

[misericordia]

edited . I have seen much better answers than mine here, in the following replies.

 

[noxagol]

Wipe out 401k to pay off house, or have it sit around to be wiped out by inflation...

 

[johnrocks]

If you have a fixed rate mortgage, why pay it off? Your screwing them if you have say a 5% interest rate and inflation is at 20%. If you want my advice I would do different things depending on your age, are you over or under 59 1/2?

 

[dannno]

If you have a fixed rate mortgage, why pay it off? Your screwing them if you have say a 5% interest rate and inflation is at 20%. If you want my advice I would do different things depending on your age, are you over or under 59 1/2?

It's not me, but yes, they are within 1-2 years of retirement (63 or 64... 65 is still the official retirement age ya?).

I guess the only reason to sell the 401k is assuming that it will not have much value in the near future.. but neither will dollars, and those will be easier to acquire (in singular form) in the future.

Sounds like it might be a good idea to sell the 401k, buy gold and keep making payments on the house.

 

[cbc58]

how can you sell off your 401k and put it into your house?

 

[dannno]

how can you sell off your 401k and put it into your house?

With penalties.. which sucks since they are so close to retirement age and would not incur them otherwise.

I don't have many details, was just trying to get a feel what other people around here thought about the question in general.

There's a chance that the penalties aren't that bad considering they are so close to retirement age, I just don't know.

 

[dannno]

I guess the next question would be:

"What is the best option, if any for investing in gold within your 401k?"

 

[ItsTime]

cash out the 401k and buy a house made of gold, two birds one stone

 

[Josh_LA]

Is it worth it?

The person is close to retirement age.

if you can sell your 401k, cash out with minimal penalties and secure it to something solid, like a house or a bunch of gold bricks, go for it. No point in taking a penalty if you're not going for a good investment, getting rid of debt or a safer deposit.

 

[noxagol]

Well, if they are this close to retirement, why not just wait and cash out after they retire to pay off the house?

 

[torchbearer]

Well, if they are this close to retirement, why not just wait and cash out after they retire to pay off the house?

How long do we have before a dollar crash? are we in one right now?

 

[dannno]

How long do we have before a dollar crash? are we in one right now?

yep, that's the dilemma..

I'm hoping that their penalties have been reduced and are insignificant so that they can control their own money and investments.. but if that's not the case then it becomes a tough decision.

 

[porcupine]

It depends on how close they are to retirement. Now would be the time to sell. If the market collapses, they'll lose the house. If they have it paid off, they'll keep it.

 

[ARealConservative]

this would be stupid.

roll the 401k into precious metals (not a cash out) and continue paying off the house at the extremely low interest rate set by the central bankers.

 

[Zippyjuan]

Since he is over 59 1/2 I think he can avoid the 10% penalty- but will still have to pay taxes on the amount. That can mean losing 25% off the top of what he has already saved. His mortgage has to be considerably lower than this so he will definaltely lose money by doing so. If the 401k is money he is going to need in retirement that would be an even greater reason not to do it. If he does not need the money for retirement, that too is an arguement not to take it out now since he will be able to tap it without any penalty in a couple or few years.

Most retirement programs will be taking a hit these days so he may have to work longer than he thinks. Talk it over with a financial planner. His company should have someone he can talk to who administers the plan about just what it will cost him to take the money now vs waiting. Another alternative would be to stop contributing to the 401k and put that money towards the mortgage.

Having a home paid for is a big help when you are retired and have lowered or no income. I plan to have mine paid in a few more years- more than a decade before I retire.