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That idea is actually being seriously discussed by economists like Teresa Ghilarducci. I don't know how well she has the ears of the Congress and the Executive branch however. Then it's an uphill battle in any event because America is full of bozos who would consider that 'socialism'. They are utterly convinced they can beat the market on their own with their 2% financial advisor buying them the flavor of the month front-loaded sector funds.
Who pays 2% to a financial advisor in addition to paying for front end loaded funds? Oh no one. Spoken like someone who has no idea how financial services works
we're thinking of buying the house we live in from my dad.......have lived in for 16 years with my dad.......colonial home with in-law apt.........there is less than 88k on the mtge left.......house and mtge in my dad's name..........we'll pay off balance.........we personally don't have a lot of debt........@ 5000k (car, credit card all together)........have a son going to a community college this fall (have 2 other children still in school) and we have a monthly cost of 1,200 of health insc premiums..........my husband gets layed off every winter (does paving - in this business for 10 years) and i just recently have been hired for a part time position..........is this a wise thing to do........we feel it could be since we have minimal debt and would then own the house out right (the home is valued at about 390k with taxes at 5600 per year)........any adivce......thanks
Did anyone else not catch that it sounds like the OP had half a million in debt? Or are we just assuming a typo?
Quote:
Originally Posted by golfgal
This thread was from 2008...
I'm also curious if anyone's thought out the fact that when this thread was started, taking out the money from the 401(k) would have actually been the best move financially(higher rates and as we all know the market tanked that year). Obviously this is with hindsight, but just goes to prove that there are always exceptions to the rules.
I'm also curious if anyone's thought out the fact that when this thread was started, taking out the money from the 401(k) would have actually been the best move financially(higher rates and as we all know the market tanked that year). Obviously this is with hindsight, but just goes to prove that there are always exceptions to the rules.
Not really.
They'd be taxed, plus they'd pay a 10% penalty, plus it's not like they can just fill their 401k back up. Limits to yearly contribution.
Would have been a horrible idea then, and a horrible idea now.
we're thinking of buying the house we live in from my dad.......have lived in for 16 years with my dad.......colonial home with in-law apt.........there is less than 88k on the mtge left.......house and mtge in my dad's name..........we'll pay off balance.........we personally don't have a lot of debt........@ 5000k (car, credit card all together)........have a son going to a community college this fall (have 2 other children still in school) and we have a monthly cost of 1,200 of health insc premiums..........my husband gets layed off every winter (does paving - in this business for 10 years) and i just recently have been hired for a part time position..........is this a wise thing to do........we feel it could be since we have minimal debt and would then own the house out right (the home is valued at about 390k with taxes at 5600 per year)........any adivce......thanks
No. Raping 401k to pay off what can be mortgaged @ 4.5% is absolutely terrible.
Don't. Do. It.
It will be one of the biggest mistakes you will make in life. I understand how seductive that pile of money looks, I considered borrowing from my 401k for a house down payment, thought again & didn't do it. From my perspective now as recently retired, a position that wouldn't be possible now if I had raided my account, I realize how lucky I was that I didn't do it. (Lucky not smart because I didn't realize the difference compounded interest would make in my account in the latter years.)
Plus you will lose about 40% to taxes & penalties if you take it out depending on your bracket.
Sit down with Dad & see if you can work something out for the future perhaps, inheritance, & you agree to pay the taxes & the physical upkeep & maintenance or something like that you can work out.
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