5 thoughts on “Is it OK to take money out of my retirement account to buy a house?”

  1. Think of the nation’s prominent institutions of higher learning, our public transit systems, our major highways, cities and towns – these assets have staying power measured in decades and centuries. Maybe that is the single most important introspection one might have when thinking about maintaining wealth. Do you own assets that have generational staying power? Wealth preservation may depend on the answer.

  2. Absolutely love the parachute analogy. That was brilliant.

    Unfortunately I too know of a few coworkers that have raised the 401k since I part of the retirement committee.

    People use the excuse that I am borrowing money from my self so I am paying interest to myself and it is a win win. However they don’t realize that if they change jobs or get terminated it all comes due immediately and if they can’t pay it back (which is pretty much always the case) they will incur a lot of penalties and fees.

  3. Getting 401k loans is nearly as bad as early withdrawals. You avoid the penalty but you generally are not allowed to continue contributing to your account until the loan is repaid in full. So you miss the company match, your chance to contribute and all that compounding. I used to be on the committee that managed the company 401k. People would borrow to go on vacation, buy a pickup truck, you name it. I retired early with over a million dollars in my 401k because I never made a withdrawal or a loan. Those who did are still working because they can’t afford to retire.


Leave a Comment