Suze Orman says no, since I'm not getting a company match. Still, I like the idea of socking away money and reducing my taxable income. I also maxxed out a roth ira. So should I save 10-20% in the 401k or completely discontinue it and use the extra income in a 5% savings account for the downpayment? I have about 30 some years until retirement.
2006-10-11 06:47:47 · 7 answers · asked by Viceroy of Jello 1 in Business & Finance ➔ Renting & Real Estate
Buy a home!!! Otherwise all the money you spend on rent is down the drain. You sound like a good saver, so it won't be long before you can live in your home paying a mortgage that will give you interest you can write off AND still begin again to contribute to your 401Ks and other investments. Yeah, get that house if you can!!
2006-10-15 04:50:12 · answer #1 · answered by branchcaptain 3 · 0⤊ 0⤋
I say yes. But others will say no. I feel that if you get into habit of putting away money now it will be easier for you in the long run. You should never look at what is going on right now. Long term should always be the goal if you are planning on being around. 2nd you can always put in a smaller amount into the 401k so you can have funds for new home. You should also look at 1st time buyers plans and other ways to buy homes with no or a little money down. If you do it this way you can enjoy the best of both worlds.
2006-10-11 06:54:51 · answer #2 · answered by Chris T 2 · 0⤊ 0⤋
Yes put it in your 401k, you can borrow it back for your down payment without a tax penalty (you will have to pay it back but you will have several years to do it.) We did just this to get our first home this summer.
Suze Orman knows her situation and not yours. Get as much info as you can and make your own choices. The 401k rules are different when you use the money you withdraw for certain things.
2006-10-11 06:58:59 · answer #3 · answered by my_iq_135 5 · 0⤊ 0⤋
You could borrow from your 401k without penalty to buy a house.
So I would do it, only like 5% though, keep the other 15% as disposable income that you can get when you need it.
try www.ingdirect.com or www.oneunited.com for good interest rates on savings accounts.
2006-10-11 06:51:40 · answer #4 · answered by lynn 5 · 0⤊ 0⤋
Since you're not getting a company match I don't see why you would utilize the 401k to save. I would opt to put that extra money into the savings account.
2006-10-11 06:57:19 · answer #5 · answered by missmozee 3 · 0⤊ 1⤋
You'll probably get much better advice from Suze Orman. Good for you, you sound like you're being responsible about saving your $.
2006-10-11 06:49:50 · answer #6 · answered by Good Times, Happy Times... 4 · 0⤊ 1⤋
putting money in a 401k has been one of the smartest financial moves i ever made. pre-tax dollars and you never miss it.
2006-10-11 06:50:42 · answer #7 · answered by SKYDOGSLIM 6 · 1⤊ 0⤋