• We’re currently investigating an issue related to the forum theme and styling that is impacting page layout and visual formatting. The problem has been identified, and we are actively working on a resolution. There is no impact to user data or functionality, this is strictly a front-end display issue. We’ll post an update once the fix has been deployed. Thanks for your patience while we get this sorted.

Question about 401k IRA my first house and quitting my job

T

TheSiege

Diamond Member
I will probably be quiting my job here in the near future. my question is this. I am a first time home buyer as of january. Can i take my 401k from my job, roll it over to an IRA then pay part of my house off with it? or can i only do that before closing without getting hit with taxes?

i know i shouldnt be usign my retirement to pay off my house. but i will be working for a place that has a 80% pension after 30 years. that means at 55 ill be able to retire with an annual income of 48k.

 
Originally posted by: TheSiege
I will probably be quiting my job here in the near future. my question is this. I am a first time home buyer as of january. Can i take my 401k from my job, roll it over to an IRA then pay part of my house off with it? or can i only do that before closing without getting hit with taxes?

i know i shouldnt be usign my retirement to pay off my house. but i will be working for a place that has a 80% pension after 30 years. that means at 55 ill be able to retire with an annual income of 48k.
Click to expand...

assuming...
your company doesn't go under
they keep the pension plan
you deside to stay 30 years...may not like the company

IMO I would not touch my 401k.

Make sure you roll your 401k into a roth ira. You'll have to pay back taxes but in the long run it will be well worth it--as you are 25 or less.

EDITED:
I believe you will have to pay taxes on anything you take out plus a 10% penalty for early withdrawl.
 
You can get part of your 401k to use for your house. The penalty is not as large as it would be just to pull money out. But I would think twice about doing that.

If you are taking another job with another employer, you can roll your 401k over to your next employer's without losing anything. However, you may come out ahead if you roll it over to a Roth IRA and continue to contribute to the Roth IRA.

EDIT: 30 years from now, retiring with an annual salary of 48k won't be much to live on. It might be OK, assuming that your house is paid for. Can you roll over your 401k to the pension from your new employer?
 
Originally posted by: BigJelly
Originally posted by: TheSiege
I will probably be quiting my job here in the near future. my question is this. I am a first time home buyer as of january. Can i take my 401k from my job, roll it over to an IRA then pay part of my house off with it? or can i only do that before closing without getting hit with taxes?

i know i shouldnt be usign my retirement to pay off my house. but i will be working for a place that has a 80% pension after 30 years. that means at 55 ill be able to retire with an annual income of 48k.
Click to expand...

assuming...
your company doesn't go under
they keep the pension plan
you deside to stay 30 years...may not like the company

IMO I would not touch my 401k.

Make sure you roll your 401k into a roth ira. You'll have to pay back taxes but in the long run it will be well worth it--as you are 25 or less.
Click to expand...

yeah...if you drain your 401k to pay down a tax-beneficial debt, you're an idiot.
 
Originally posted by: TheSiege
well the pension is part of a union contract
Click to expand...

which is only good for as long as the contract. 3 years from now, the union may be busted, 3 years from now, the company might be bought out or go broke. If you do this, you'll have no one to blame but yourself down the line. Times are changing....ask people who worked at Goodyear and GM about their pensions.
 
Originally posted by: MikeyIs4Dcats
Originally posted by: TheSiege
well the pension is part of a union contract
Click to expand...

which is only good for as long as the contract. 3 years from now, the union may be busted, 3 years from now, the company might be bought out or go broke. If you do this, you'll have no one to blame but yourself down the line. Times are changing....ask people who worked at Goodyear and GM about their pensions.
Click to expand...

yeah GM/Ford declares bankruptcy and there goes their pensions.

People should never rely on the government or private companies to take care of them selves. Better yet if the company honors your pension plan your kids will reap the benefits of a bigger inheritance. No kids then give it charity. Better to have more than less money.
 
you realize that 40k today is roughly equal to 100k 30 years from now with 3% inflation. so a 48k pension is about the same as living on 20k right now. think you can live on that?

i wouldnt touch your 401k. but thats just me.
 
Originally posted by: Elbryn
you realize that 40k today is roughly equal to 100k 30 years from now with 3% inflation. so a 48k pension is about the same as living on 20k right now. think you can live on that?

i wouldnt touch your 401k. but thats just me.
Click to expand...

I highly doubt his actual pension is defined as 80% of his day-1 salary, in unadjusted dollars.

Assuming everything with the pension works as planned, it's unlikely that it would be worth less than $48k, in 2007 dollars when all is said and done.

I agree you shouldn't count on a pension as a guarantee though, the laws that govern pensions are themselves criminal, and as a result you can very easily be screwed.

A pension plan, by definition should always be fully funded, and as a result, the company that sets it up should be able to go broke (i.e. disappear off the face of the earth) with no effect on pension obligations.
 
Originally posted by: MikeyIs4Dcats
Originally posted by: BigJelly
Originally posted by: TheSiege
I will probably be quiting my job here in the near future. my question is this. I am a first time home buyer as of january. Can i take my 401k from my job, roll it over to an IRA then pay part of my house off with it? or can i only do that before closing without getting hit with taxes?

i know i shouldnt be usign my retirement to pay off my house. but i will be working for a place that has a 80% pension after 30 years. that means at 55 ill be able to retire with an annual income of 48k.
Click to expand...

assuming...
your company doesn't go under
they keep the pension plan
you deside to stay 30 years...may not like the company

IMO I would not touch my 401k.

Make sure you roll your 401k into a roth ira. You'll have to pay back taxes but in the long run it will be well worth it--as you are 25 or less.
Click to expand...

yeah...if you drain your 401k to pay down a tax-beneficial debt, you're an idiot.
Click to expand...

.
 
You must log in or register to reply here.

TRENDING THREADS

Back
Top