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

[Anonymous]

Anonymous wrote:

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.

He didn’t have to put 45% down. He is missing out on a lot of future growth. A doubling on average every 7-10 years.

+1

That rarely happens with a house, but routinely does with the market.

Yes you can live however you want. Most Americans do that, and are in financial trouble, with a very low networth, no Emergency fund and in trouble financially. Doesn't make it right

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

This, exactly. My husband and I had our retirement plan all mapped out. Until my very stable job was eliminated. I am 53 and can’t find anything reasonably close to what I had before. Now I am not contributing to my 401k and have become a SAHM at 53.

There are hundreds of people like me out there.

Yep. I'm in my 50s and facing possible job loss (thanks DOGE). they have pretty much decimated my entire sector so not sure what kind of job I'll be able to get. And college costs start in year.

So sorry for all of this!

However, this is precisely why planning to "cash flow" college is not always the best idea. Much better to save for it

[Anonymous]

I think the bottom line is the OP bought a house she can't really afford. She decimated her retirement savings to purchase it and put too much down on it.

You may want to work forever, but as others have said that may not be an option due to an unexpected decline in health, layoff, etc.

If was OP, I would be working to aggressively save and bring in more money NOW. Since you bought a $700K house, I'm assuming it's more than one bedroom. I would take on a roommate to make extra money, see about getting a second job in retail or something on the weekends, and max out 401K, do an IRA, and also contribute to an after-tax investment account. You have a lot a catching up to do with your retirement account.

And, most importantly do NOT start spending even more money on the house (furniture, upgrades, renos), except for required maintenance.

[Anonymous]

OP: Enjoy your home. Congratulations !

OP it was/is your money and your right to decide how to use it. Your money, your priorities.

If you want a financial calculation, determine your monthly savings of owning versus renting then invest the difference each month.

[Anonymous]

OP, we are thinking about raiding our retirement account as well. Curious to other people’s thoughts.

DH and I are 50 and 51. We are both contributing the max with catchup contributions to our respective 401k plans ($62K per year + 14K employer matching). We have $189K and $117K in our 401k plans currently. We also have two Rollover IRAs with Fidelity from our previous jobs. Combined, we have $3.6M in those, all invested in individual stocks and ETFs and actively traded. Our IRA is up 32% YTD, up 37% over the past 1 year, up 98% over the past 3 years, and up 161% over the past 5 years.

We’re thinking about paying taxes and accepting a 10% early withdrawal penalty to pay down some debt: car loan, second mortgage. Would do it so we stay in the 35% tax bracket, but will still lose over half of what we withdraw to taxes due to penalty.

We’re up in our Rollover IRA by 32% ($875K) since January 2025, which blows the S&P 500 out of the water. Figure we could take out $200K and still be doing really well. New administration drama + active trading in tax sheltered account has been very profitable. Thoughts?

[Anonymous]

Anonymous wrote:OP, we are thinking about raiding our retirement account as well. Curious to other people’s thoughts.

DH and I are 50 and 51. We are both contributing the max with catchup contributions to our respective 401k plans ($62K per year + 14K employer matching). We have $189K and $117K in our 401k plans currently. We also have two Rollover IRAs with Fidelity from our previous jobs. Combined, we have $3.6M in those, all invested in individual stocks and ETFs and actively traded. Our IRA is up 32% YTD, up 37% over the past 1 year, up 98% over the past 3 years, and up 161% over the past 5 years.

We’re thinking about paying taxes and accepting a 10% early withdrawal penalty to pay down some debt: car loan, second mortgage. Would do it so we stay in the 35% tax bracket, but will still lose over half of what we withdraw to taxes due to penalty.

We’re up in our Rollover IRA by 32% ($875K) since January 2025, which blows the S&P 500 out of the water. Figure we could take out $200K and still be doing really well. New administration drama + active trading in tax sheltered account has been very profitable. Thoughts?

Why tf would you do that instead of just pulling back on contributions to pay off the debt?

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, we are thinking about raiding our retirement account as well. Curious to other people’s thoughts.

DH and I are 50 and 51. We are both contributing the max with catchup contributions to our respective 401k plans ($62K per year + 14K employer matching). We have $189K and $117K in our 401k plans currently. We also have two Rollover IRAs with Fidelity from our previous jobs. Combined, we have $3.6M in those, all invested in individual stocks and ETFs and actively traded. Our IRA is up 32% YTD, up 37% over the past 1 year, up 98% over the past 3 years, and up 161% over the past 5 years.

We’re thinking about paying taxes and accepting a 10% early withdrawal penalty to pay down some debt: car loan, second mortgage. Would do it so we stay in the 35% tax bracket, but will still lose over half of what we withdraw to taxes due to penalty.

We’re up in our Rollover IRA by 32% ($875K) since January 2025, which blows the S&P 500 out of the water. Figure we could take out $200K and still be doing really well. New administration drama + active trading in tax sheltered account has been very profitable. Thoughts?

Why tf would you do that instead of just pulling back on contributions to pay off the debt?

Also you may be able to just take out the contributions from the IRA to pay off your debt. although I truly question why you have so much debt?

[Anonymous]

Oh no. Good luck!

[Anonymous]

Anonymous wrote:OP, we are thinking about raiding our retirement account as well. Curious to other people’s thoughts.

DH and I are 50 and 51. We are both contributing the max with catchup contributions to our respective 401k plans ($62K per year + 14K employer matching). We have $189K and $117K in our 401k plans currently. We also have two Rollover IRAs with Fidelity from our previous jobs. Combined, we have $3.6M in those, all invested in individual stocks and ETFs and actively traded. Our IRA is up 32% YTD, up 37% over the past 1 year, up 98% over the past 3 years, and up 161% over the past 5 years.

We’re thinking about paying taxes and accepting a 10% early withdrawal penalty to pay down some debt: car loan, second mortgage. Would do it so we stay in the 35% tax bracket, but will still lose over half of what we withdraw to taxes due to penalty.

We’re up in our Rollover IRA by 32% ($875K) since January 2025, which blows the S&P 500 out of the water. Figure we could take out $200K and still be doing really well. New administration drama + active trading in tax sheltered account has been very profitable. Thoughts?

f*ck. you are not in the same situation as OP. go start your own thread

[Anonymous]

Anonymous wrote:OP, we are thinking about raiding our retirement account as well. Curious to other people’s thoughts.

DH and I are 50 and 51. We are both contributing the max with catchup contributions to our respective 401k plans ($62K per year + 14K employer matching). We have $189K and $117K in our 401k plans currently. We also have two Rollover IRAs with Fidelity from our previous jobs. Combined, we have $3.6M in those, all invested in individual stocks and ETFs and actively traded. Our IRA is up 32% YTD, up 37% over the past 1 year, up 98% over the past 3 years, and up 161% over the past 5 years.

We’re thinking about paying taxes and accepting a 10% early withdrawal penalty to pay down some debt: car loan, second mortgage. Would do it so we stay in the 35% tax bracket, but will still lose over half of what we withdraw to taxes due to penalty.

We’re up in our Rollover IRA by 32% ($875K) since January 2025, which blows the S&P 500 out of the water. Figure we could take out $200K and still be doing really well. New administration drama + active trading in tax sheltered account has been very profitable. Thoughts?

Why not stop the catch up contributions and use that money to pay down the second mortgage and other debt?

Would make much more sense than pulling money out of your retirement savings, and the stock market is going to be wonky for at least the next three years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, we are thinking about raiding our retirement account as well. Curious to other people’s thoughts.

DH and I are 50 and 51. We are both contributing the max with catchup contributions to our respective 401k plans ($62K per year + 14K employer matching). We have $189K and $117K in our 401k plans currently. We also have two Rollover IRAs with Fidelity from our previous jobs. Combined, we have $3.6M in those, all invested in individual stocks and ETFs and actively traded. Our IRA is up 32% YTD, up 37% over the past 1 year, up 98% over the past 3 years, and up 161% over the past 5 years.

We’re thinking about paying taxes and accepting a 10% early withdrawal penalty to pay down some debt: car loan, second mortgage. Would do it so we stay in the 35% tax bracket, but will still lose over half of what we withdraw to taxes due to penalty.

We’re up in our Rollover IRA by 32% ($875K) since January 2025, which blows the S&P 500 out of the water. Figure we could take out $200K and still be doing really well. New administration drama + active trading in tax sheltered account has been very profitable. Thoughts?

Why tf would you do that instead of just pulling back on contributions to pay off the debt?

+1

[Anonymous]

I was a financial advisor at a bank branch in Reston, VA in 2000. Guy comes in, age 35, says he is tapping his 401k to buy a property. I shook my head at him, thought he could do something else but he walked off. I'm sure that guy has done well with that Reston area property. So without knowing all the details like interest rate on the loan, taxes paid with penalties for early withdrawal, harder to comment. Conventional wisdom says no but depending on the location, could be an okay choice.

All that fiscal spending by Congress with a new tax bill, could support homeowners and real estate in prime locations.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

He didn’t have to put 45% down. He is missing out on a lot of future growth. A doubling on average every 7-10 years.

+1

That rarely happens with a house, but routinely does with the market.

Yes you can live however you want. Most Americans do that, and are in financial trouble, with a very low networth, no Emergency fund and in trouble financially. Doesn't make it right

A lot of people double their down payment in 7 years. I put down 20% for a 1.3M house that is worth $1.7 in just five years. And that money is tax free unlike 401K money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

He didn’t have to put 45% down. He is missing out on a lot of future growth. A doubling on average every 7-10 years.

+1

That rarely happens with a house, but routinely does with the market.

Yes you can live however you want. Most Americans do that, and are in financial trouble, with a very low networth, no Emergency fund and in trouble financially. Doesn't make it right

A lot of people double their down payment in 7 years. I put down 20% for a 1.3M house that is worth $1.7 in just five years. And that money is tax free unlike 401K money.

Huh? It’s not tax free.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, we are thinking about raiding our retirement account as well. Curious to other people’s thoughts.

DH and I are 50 and 51. We are both contributing the max with catchup contributions to our respective 401k plans ($62K per year + 14K employer matching). We have $189K and $117K in our 401k plans currently. We also have two Rollover IRAs with Fidelity from our previous jobs. Combined, we have $3.6M in those, all invested in individual stocks and ETFs and actively traded. Our IRA is up 32% YTD, up 37% over the past 1 year, up 98% over the past 3 years, and up 161% over the past 5 years.

We’re thinking about paying taxes and accepting a 10% early withdrawal penalty to pay down some debt: car loan, second mortgage. Would do it so we stay in the 35% tax bracket, but will still lose over half of what we withdraw to taxes due to penalty.

We’re up in our Rollover IRA by 32% ($875K) since January 2025, which blows the S&P 500 out of the water. Figure we could take out $200K and still be doing really well. New administration drama + active trading in tax sheltered account has been very profitable. Thoughts?

f*ck. you are not in the same situation as OP. go start your own thread

lol