Reply to Cashing out 401K to payoff mortgage

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[quote=Anonymous][i] "Personally I have always advocated Real estate because it is like gold, a physical investment whereas stocks are theoretical. I want to be able to touch my investments." [/i] 
   
 
I just bought a small rental and borrowed against my 401k for the downpayment. With the impending "fiscal cliff" looming before us, the temptation to cash out the rest and pay down on that mortgage is great. Our goal is to downsize into the apartment we are building over our shop, and rent out our current home and the smaller home. One plan is to refinance and roll both mortgages into one. Our mortgage payment will be made by the rentals, the apartment will be paid off, and we will be able to build our cash savings again, while also investing in improvments to the rental properties. We would also start buying physical silver and gold. Our parents are aging and there is potential for inheritance income, which would enable us to further pay down our debt. We have no credit cards, and only one vehicle loan remaining.

My husband works for a federal agency, and I work for a consultant on a federally funded project. Not a good place to be if federal funding is slashed in 2013. We also live in a remote town in the northwest, far from urban centers. Hopefully, the government will avoid the crisis by "kicking the can down the road" and we can see our current plan through to fruition.

While so many advocate planning and investing in retirement, we are being realistic in the fact that we will both be working into our 60s and 70s and cannot really plan on retirement funds to support us. With the volatility of the market, seeing those funds evaporate at the whim of the market is frustrating. I want something tangible that I can see and touch. I am not reassured by participating in a retirement plan driven by our current economy. I want out.[/quote]

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