I'm in a 401K with my new job, I'm about 10 years from retirement.
2006-06-29 10:04:44 · 10 answers · asked by DAVID H 1 in Business & Finance ➔ Investing
NO....there is a substantial penalty, usually 10% for withdrawing 401K money early...not to mention you will have to pay taxes on the money. Don't do it.
2006-06-29 10:07:50 · answer #1 · answered by Jenny A 6 · 0⤊ 0⤋
Quite the opposite.
Refinance your home loan NOW before property values plummet in the coming year - and then invest as much as you are permitted in the 401 K, and the rest in very stable stocks, bonds and other places. You need a good and reliable investment counselor for that.
The reason? Your property now has more value than it will when the debt-ridden bubble of the real estate economy contracts, and housing prices fall. If you are in this for the long term, you won't care if the value of your house drops for a couple or four years. AND you will have relatively low-interest financing while you put the money out at higher rates of return. And you get to write off so much of your mortgage payments from taxes.
You can really set yourself up well for the rest of your life this way. All you do by cashing in the 401K is cost yourself a tax penalty, increase taxes, and lose a big fat mortgage deduction in future years.
2006-06-29 10:16:51 · answer #2 · answered by Der Lange 5 · 0⤊ 0⤋
I must agree with the rest NO. The home will pay off soon enough. But the 401K is a must have. You may consider making an extra payment each year or just paying "something" extra each month. Get rid of a few latte factors (morning coffee, dry cleaning every week) and put the extra money towards the home payment each month.
2006-06-29 10:32:01 · answer #3 · answered by Ms. Dorsey 3 · 0⤊ 0⤋
The best answer is no because 1) you can deduct interest on your loan 2)your house will keep appreciating 3)10% penalty payment upon withdrawal of funds 4) Your 401K money grows faster towards the end...The power of compounding the $$.
Unless you know you have a terminal disease, don't do it..
2006-06-29 10:20:13 · answer #4 · answered by donemilin 1 · 0⤊ 0⤋
Not advisable. With 10 years until retirement, you may need that fund. The penalties for withdrawing early, and the tax at the end of the year, you will only lose money. Also take into consideration losing company benefits such as health insurance.
2006-06-29 10:13:20 · answer #5 · answered by laughsall 4 · 0⤊ 0⤋
no way - that is your retirement savings and you have time to pay off your house PLUS the government helps you pay it off by letting you write off the interest. You will need that 401K in 10 years I doubt social security will last that long.
2006-06-29 10:08:36 · answer #6 · answered by jessica 4 · 0⤊ 0⤋
Don't touch the 401K. That is your nest egg. The debt on your house is OK. Don't sweat it!
2006-06-29 10:11:11 · answer #7 · answered by Anonymous · 0⤊ 0⤋
no way. the penalties you will have to pay for early withdrawl are very high. that and the interest you pay on your home loan is tax deductable, you would lose that also.
2006-06-29 10:08:55 · answer #8 · answered by Kutekymmee 6 · 0⤊ 0⤋
No.
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2006-06-29 20:49:39 · answer #9 · answered by Anonymous · 0⤊ 0⤋
Never---you will need that when you retire.
2006-06-29 10:14:50 · answer #10 · answered by Laura G 1 · 0⤊ 0⤋