Stupid me emptied my 401k to buy a house at 42

[Anonymous]

Anonymous wrote:If his house is paid off by the time he retires, I think the between social security and 401k he will enough to live no?

Or do we all need 3 million a least (excluding social security) to retire?

42 with no retirement savings. Even if they contribute 30K every year, by 62, it would barely reach $800K, and that's with 8% annual return for 10 years - highly unlikely.

They could always sell their house and move to a smaller one when they retire. They just have to hope that the real estate market doesn't tank when they need to sell.

Yes, the stock market could tank at any time, impacting retirees investments (ahem.. like the past couple of months), but if you are a smart investor, you would've moved most of your assets to something less risky by then.

[Anonymous]

Anonymous wrote:For everyone born 1960 and later, please stop using 65 as a default.

The government moved the goalposts decades ago.

For those born in 1960 or later, the full retirement age for Social Security is 67.

But you can collect at 62, albeit a lesser amount. 65 is the target age because that's when you can get medicare. Healthcare is going to be the biggest expense, after housing, at 60.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You may not planning on retiring at 50 something, but you may be forced to. Lots of 50s something getting laid off then can't find another job that pays even close to what they were making.

I suppose you could always sell your house if you need the $$ later.

The United States cannot afford a bunch of 50 years old forced into a retirement. The impact on growth will be massive.

Tell that to DOGE.

+1

[Anonymous]

Anonymous wrote:You may not planning on retiring at 50 something, but you may be forced to. Lots of 50s something getting laid off then can't find another job that pays even close to what they were making.

I suppose you could always sell your house if you need the $$ later.

That's me. I'm a 50 something former VP with 25 yrs of solid experience in my field, and I can't even get an interview. I think it's largely because I'm a woman, and because I was an exec--so first assumption is always overqualified/overcompensated.

That said I'm not looking very hard as NW is over $10m, fortunately.

(Also, answer to OP's question: we borrowed money from 401k years and years ago for a downpayment but repaid quickly)

[Anonymous]

Anonymous wrote:If his house is paid off by the time he retires, I think the between social security and 401k he will enough to live no?

Or do we all need 3 million a least (excluding social security) to retire?

is he going to retire at 72?

[Anonymous]

Anonymous wrote:

Anonymous wrote:For everyone born 1960 and later, please stop using 65 as a default.

The government moved the goalposts decades ago.

For those born in 1960 or later, the full retirement age for Social Security is 67.

But you can collect at 62, albeit a lesser amount. 65 is the target age because that's when you can get medicare. Healthcare is going to be the biggest expense, after housing, at 60.

BINGO!

ACA plans once you hit 55+ are not cheap. the pricing goes up yearly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For everyone born 1960 and later, please stop using 65 as a default.

The government moved the goalposts decades ago.

For those born in 1960 or later, the full retirement age for Social Security is 67.

But you can collect at 62, albeit a lesser amount. 65 is the target age because that's when you can get medicare. Healthcare is going to be the biggest expense, after housing, at 60.

And most of us who are under 65 can't afford to do that.

Full retirement age is now 67 for most of us and 70 for people who think they will love longer or who don't have much in savings.

OP, start saving as much as you can to refill your 401k. You must have taken a huge tax hit to pull all of that out.

[Anonymous]

Anonymous wrote:Last year, Stupid me emptied my 401k to buy a house at 42. I just got tired of waiting and home prices just kept going up while rates still remained high.

I bought a $700k house and put 45% down $315,000 and with fees I put $350k. After paying taxes and penalties etc my $401 balance is down to $50k. I don't have an IRA account either.

1 year later, mortgage is reasonable, living expenses and maintenance costs are reasonable as well and built my savings to 20k in 1 year.

Now I am starting retirement planning over. I just contributed the max to Roth.

Anyone else raided their 401k? Do you regret it? Or did it turn out to be a good decision?

I don't plan to retire at 50 like most people here..as long as someone wants my services I am going to work until at least 65.

Taking a 401k withdrawal early is like taking out a 30% loan after taxes and fees. Cmon man.

[Anonymous]

Why TF did you do that? So many better options...

[Anonymous]

Anonymous wrote:

Anonymous wrote:If his house is paid off by the time he retires, I think the between social security and 401k he will enough to live no?

Or do we all need 3 million a least (excluding social security) to retire?

42 with no retirement savings. Even if they contribute 30K every year, by 62, it would barely reach $800K, and that's with 8% annual return for 10 years - highly unlikely.

They could always sell their house and move to a smaller one when they retire. They just have to hope that the real estate market doesn't tank when they need to sell.

Yes, the stock market could tank at any time, impacting retirees investments (ahem.. like the past couple of months), but if you are a smart investor, you would've moved most of your assets to something less risky by then.

$800,000 is slmost a million dollars. That would be a lot of money when factoring in social security + no mortgage. assuming OP downsizes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You may not planning on retiring at 50 something, but you may be forced to. Lots of 50s something getting laid off then can't find another job that pays even close to what they were making.

I suppose you could always sell your house if you need the $$ later.

The United States cannot afford a bunch of 50 years old forced into a retirement. The impact on growth will be massive.

It's already happening. Ageism is getting worse.

[Anonymous]

I sold two properties, that we should have never bought, put the money into market and retired years before 50.
The money I put in the market is in Roths and in investment accounts. I did all my own investing and learned a lot more than I ever did holding on to those properties.
I bought a new stock on dip yesterday and it's up 6% today. The other Roth sits in cash since last week when I made 12%. Couple of percenatges every few weeks and my return is 100%. Just figured it out after most people said that it can't be done.
I never had 401k offered at work in 29 years. I bet some of the money you got, was 'free money'. Nothing is free. It kept you from learning to invest on your own. You should have done only up to the match, then Roth, and then investment account hands on.
I'm getting my rent lowered. Nobody talks about rents going down or squeezing yourself into smaller place for a year or two to save money.
I also don't really have tax expense, because I'm HH and I make passive income. You got to avoind such mistakes going forward. You can see what that $350k would have been in 10 while renting versus your house.
We sold even the last property and $250k is growing for 11 year old.
We are really not into real estate, but I may have a house built abroad in 15 years.

[Anonymous]

Anonymous wrote:Yeah dumb move. Like really dumb. Why did you feel the need to take all the money and put that much down?!

Really? I don’t see the problem. Not everyone lives their lives the same way. He wanted to own a home he bought a home. He shouldn’t have to live in fear of what might happen in 25 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yeah dumb move. Like really dumb. Why did you feel the need to take all the money and put that much down?!

Really? I don’t see the problem. Not everyone lives their lives the same way. He wanted to own a home he bought a home. He shouldn’t have to live in fear of what might happen in 25 years.

+1. And he said he already saved $20k after a year. People manage risks differently.

[Anonymous]

Anonymous wrote:You may not planning on retiring at 50 something, but you may be forced to. Lots of 50s something getting laid off then can't find another job that pays even close to what they were making.

I suppose you could always sell your house if you need the $$ later.

Yep. I was “retired” by 2 companies , pushed out at 60 and second time at 63. Both companies make extensive use of h1bs to replace US workers

Ageism is rampant in tech companies