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CAMCaps
Live Laugh Love Run
Member since 6/07 4922 total posts
Name:
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Re: Opinions please: Would you cash out your 401k?
I would not - that is your retirement!
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Posted 12/7/10 7:41 PM  |
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Prudential Douglas Elliman Real Estate
Long Island's Largest Bridal Resource | Long Island Weddings |
LAMGAJ28
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Member since 10/05 6039 total posts
Name:
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Re: Opinions please: Would you cash out your 401k?
I'd go with the loan option out of the plan otherwise I wouldn't do it. Find the particulars in regards if you get charged for a penalty, if it's going to be taxed and if you'd have to pay it all at once in full if either of you becomes unemployed. Good luck with your decision !
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| Posted 12/7/10 10:15 PM |
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MrsPJB2007
MBA at your service!
Member since 7/06 12020 total posts
Name:
MJ
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Re: Opinions please: Would you cash out your 401k?
No.
Remember only the first 10K is exempt from penalty -- and you will still have to add the amount you take out of the 401K to your income for the entire year. Yes you will have 20% withheld from it when you cash it out -- but there is a chance, depending on your salary, that it could increase your overall tax for the year and maybe even push you into a higher tax bracket.
I would not recommend doing it at all, look into an FHA loan that doesn't require 20% down instead.
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| Posted 12/7/10 10:21 PM |
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Mrs213
????????
Member since 2/09 18986 total posts
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Re: Opinions please: Would you cash out your 401k?
Never!
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| Posted 12/7/10 10:27 PM |
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lilacwine
only love...
Member since 5/05 2034 total posts
Name:
<3
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Re: Opinions please: Would you cash out your 401k?
It's a risk, but I've seen people do this and it worked out very well for them.
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| Posted 12/7/10 10:32 PM |
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KittyGags
LIF Adult
Member since 7/09 5614 total posts
Name:
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Re: Opinions please: Would you cash out your 401k?
For me, it would depend on the situation...you're both young and can double up (max out deductions) going forward to recoup (kinda)...the interest rates aren't going to get better than now...and to be honest, you're outgrowing where you are. I'd borrow as minimally as possible against it, but I'd try very very hard to not clean it out.
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| Posted 12/7/10 10:37 PM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: Opinions please: Would you cash out your 401k?
why not decrease your 401k elections and put that $$ towards your downpayment - this way you can be in a house in a year instead of 2 and not have to touch your 401k balance you currently have?
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| Posted 12/8/10 9:26 AM |
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neener1211
:-)
Member since 4/07 22952 total posts
Name:
J
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Re: Opinions please: Would you cash out your 401k?
never
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| Posted 12/8/10 9:38 AM |
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babymakes3
Almost there!
Member since 7/06 7376 total posts
Name:
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Re: Opinions please: Would you cash out your 401k?
I wouldn't.
I would do the $10k loan if you need the cash and can't get a better rate at a bank but I would never cash out a 401k.
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| Posted 12/8/10 10:17 AM |
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mommy2Alex
3 babies for me :)
Member since 5/05 6683 total posts
Name:
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Re: Opinions please: Would you cash out your 401k?
Never, the only way I would cash out our retirement funds is if we were going to lose our home because of a layoff or illness.
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| Posted 12/10/10 5:12 PM |
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JennZ
MY LIFE!!
Member since 8/05 25463 total posts
Name:
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Re: Opinions please: Would you cash out your 401k?
Never. Not in this economy. Go for the FHA, we did it. So much easier and rates are great.
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| Posted 12/10/10 5:16 PM |
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smdl
I love Gary too..on a plate!
Member since 5/06 32461 total posts
Name:
me
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Re: Opinions please: Would you cash out your 401k?
no I would not cash out. You will lose in taxes and penalty.
You have a good amount saved. Good for you! You don't know if you will be able to contribute as much later on. This amount will help with the compound interest it will bring.
I don't recommend a loan at all either. You would have to reimbursed the $$$ if you were to lose your job.
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| Posted 12/10/10 8:44 PM |
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Erica
LIF Adult
Member since 5/05 11767 total posts
Name:
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Re: Opinions please: Would you cash out your 401k?
retirement is something I don't think about touching until I retire.
Even a loan isn't a great idea. You have to pay it back with already taxed money (take home) just for it to be taxed again at retirement.
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| Posted 12/11/10 9:37 AM |
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LDrinkh20
LIF Adult
Member since 9/09 1820 total posts
Name:
Lauren
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Re: Opinions please: Would you cash out your 401k?
I think taking a loan against your retirement is a good idea since the interest rates are WAY lower than a loan you could take out elsewhere. We borrowed some money from my 403 B for our home and are way glad we did. We also checked with our financial advisor as well as some other coworkers who have all done the same thing. If you are nearing retirement age then no I wouldn't say go for it, but if you are early in your career and you are secure then I say go for it.
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| Posted 12/12/10 11:04 AM |
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Goobster
:)
Member since 5/07 27557 total posts
Name:
:)
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Re: Opinions please: Would you cash out your 401k?
NO WAY
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| Posted 12/12/10 3:03 PM |
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queensgal
Smile
Member since 4/09 3287 total posts
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Re: Opinions please: Would you cash out your 401k?
Careful with a 401k loan
You end up paying double taxes on the amount you borrow. Yes you "pay yourself" the interest but you pay uncle sam the taxes twice.
When you do a 401k loan, you borrow pre-tax money from your account, to repay the loan, you have to use after-tax money. Then when you actually retire, you will be taxed again on that same money.
Just factor this in when you weigh your options.
To answer your question, No, I would not cash in my 401k.
Could you borrow money from a family member? Do you have other sources you can borrow from?
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| Posted 12/13/10 8:52 PM |
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Mrs213
????????
Member since 2/09 18986 total posts
Name:
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Re: Opinions please: Would you cash out your 401k?
Get an FHA loan before you cash out your 401k. No one really puts down 20 percent anymore.
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| Posted 12/13/10 11:16 PM |
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smdl
I love Gary too..on a plate!
Member since 5/06 32461 total posts
Name:
me
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Re: Opinions please: Would you cash out your 401k?
Posted by LDrinkh20
I think taking a loan against your retirement is a good idea since the interest rates are WAY lower than a loan you could take out elsewhere. We borrowed some money from my 403 B for our home and are way glad we did. We also checked with our financial advisor as well as some other coworkers who have all done the same thing. If you are nearing retirement age then no I wouldn't say go for it, but if you are early in your career and you are secure then I say go for it.
A lot of plans will only allow you to borrow up to 50% of you plan.
AND the most negative issue is that if you leave your job (by choice OR not!) you will have to repay the loan within 60-90 days otherwise it will be concidered a cash out with tax and penalty occuring.
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| Posted 12/14/10 12:15 AM |
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Erica
LIF Adult
Member since 5/05 11767 total posts
Name:
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Re: Opinions please: Would you cash out your 401k?
Posted by queensgal
Careful with a 401k loan
You end up paying double taxes on the amount you borrow. Yes you "pay yourself" the interest but you pay uncle sam the taxes twice.
exactly, you have to remember the 25-30% you pay in taxes on each dollar that you are paying the loan back with. Doesn't sound like a great deal.
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| Posted 12/14/10 3:22 PM |
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LDrinkh20
LIF Adult
Member since 9/09 1820 total posts
Name:
Lauren
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Re: Opinions please: Would you cash out your 401k?
Posted by smdl
Posted by LDrinkh20
I think taking a loan against your retirement is a good idea since the interest rates are WAY lower than a loan you could take out elsewhere. We borrowed some money from my 403 B for our home and are way glad we did. We also checked with our financial advisor as well as some other coworkers who have all done the same thing. If you are nearing retirement age then no I wouldn't say go for it, but if you are early in your career and you are secure then I say go for it.
A lot of plans will only allow you to borrow up to 50% of you plan.
AND the most negative issue is that if you leave your job (by choice OR not!) you will have to repay the loan within 60-90 days otherwise it will be concidered a cash out with tax and penalty occuring.
Right,our plan you can cash out up to 80%. And we checked the repayment policy to make sure it worked for us. THat's something yous hould do with any loan you are taking, obviously.
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| Posted 12/14/10 3:40 PM |
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