Reply to Borrowing from retirement accounts for down payment

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]If you have room in your budget for repayment, you would have room in your budget to save. Clearly you don’t, because you don’t have the savings.[/quote]

This makes no sense.[/quote]

It makes perfect sense. How do they plan to repay? Whatever money will be going toward that should be funneled into saving for the larger down payment. It doesn’t sound like there are time constraints.[/quote]

No it makes zero sense.  They’re saving money in the 401k.  It sounds like your suggestion is they stop saving in the 401k and save in their regular account until they get $50k.  Nothing wrong with thanking the loan OP.  Not everyone has tens of hours ands of dollars sitting around.  [/quote]

So you are advising them to take $50k out of the 401k, then stop making 401k contributions for the 3-5 years it takes to repay the 401k loan?[/quote]

No, I’m saying that the 401k is savings and there is nothing wrong with borrowing from it.  I save more in the 401k instead of a regular account because I can take a loan if I need to.[/quote]

That’s nice. How do you recommend they repay the 401k loan if they don’t have room in their budget?[/quote]

So to be clear, you think that because they can’t come up with 50 grand all at once, they can’t afford a couple hundred a month loan payment for 15 years?  Like I said, your comments make no sense.  It sounds like problems you’ve never had to deal with.[/quote]

No, this sounds like a problem you’ve never had to deal with.

You can’t repay a 401k loan over 15 years. You have 5 years. And if you leave your job (or get fired, or laid off) before that 5 years is up, you repay the loan immediately, or it is treated as income, and taxed accordingly, plus 10 percent. But you’re not withholding that money through payroll deduction, so come April 15, OP will owe thousands (or tens of thousands to the IRS). And again, she doesn’t have room in her budget to save, so where will the money to pay the tax bill come from?

OP isn’t asking about a loan to feed her children or obtain life-saving medical care: she wants to buy a luxury item.[/quote]

Your ignorance and arrogance is astounding.  You have 5 years for a regular loan and 15 years for a home loan.  Just quit while you’re behind.[/quote]

OP, listen to this poster.

Both of you should take $50k from your 401ks, and combine that with existing savings to buy the best house you can stretch for. You don’t want your kids to go to a school with the poors, and I bet your incomes will rise exponentially at your current employers once you buy a house.[/quote]

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