• Hey Guest. Check out your NeoGAF Wrapped 2025 results here!

Making a 401K withdrawal, anyone else?

Hoho for breakfast

Hoho for breakfast

Member
I need a lot of stuff on my house fixed up, and with the CARES Act it looks like now is the time to dip into my 401K and get some stuff done. Was mostly just wondering what others think of this as I know most people with money will say to only use it as a last resort etc..but it's extremely tempting.

Is anyone else doing this? What are you doing with the money?
 
Last edited:
I think that should be your ABSOLUTE LAST thing you do to get money, you should not be tapping that resource. If you absolutely have to, then do a 401k loan, not a withdraw, at least you'll be paying yourself back with interest. But its a very bad idea unless its a real emergency. Fixing up things in the house other than a roof leak or foundation crack/shift, arent emergencies.
 
Zero chance I'm pulling anything out of my 401(k) right now, especially with the market down. That's a last resort measure. My retired parents are talking about putting in a pool and my mom mentioned dipping into their 401(k) for it and I almost raised my voice at her, if anything take out a HELOC with the current interest rates...

"That's what your father said..."

Yeah no shit, don't sell low.
 
Last edited by a moderator:
At some point we may withdraw some from my wife's SEP IRA for a down payment on a house, since that's tax liability free. No time soon though. Chicago real estate sucks...so many places go full cash deals, trying to buy a house like a normal person is near impossible.

Buddy of mine sold his condo two years ago. Sold in 24 hours for 30K over asking in an all cash deal. I don't have that type of scratch to throw around
 
With the Wuhan flu market downturn and the imminent retirement wave of Boomers, capital investment is going to become scarcer and highly-rewarded. Keep it in and watch it grow.
 
I don't much like you guys. Except chitzy :messenger_grinning_squinting:

Fixing my house is better than my initial hookers and blow plan at least. Or is it? Watch for my next thread "I blew my life savings on hookers and blow. AMA" :messenger_grinning:
 
Last edited:
Time to crystallize those losses?

normally a bad idea.
Can't even think about giving advice without knowing your age, $401k size, dependents and occupations/income.

I am not asking for that info on a forum like this so won't give advice other than.

It's a bad idea, your going to miss the rebound. Talk to your accountant first.
 
For house repairs? Jesus no.
This is your future self OP, vanishing as you make these decisions.
 
You have to do what you have to do, but yea, considering the market is down 20%, locking in those losses now is a REALLY bad idea. It is very unwise to make any big decisions while this ridiculous hysteria is going on. Once people realize that we destroyed our economy over a flu strain, people will get mad, but people will also get back to work.

Take it from someone who was working and had a 401k during the last downturn, the only people who ended up in a bad spot permanently were those who withdrew from the market at the bottom. Everyone else recovered and then some.
 
Last edited:
JESgcd1.jpg



z0I2R1a.jpg
 
Remember you will owe taxes on anything you take out and don't put back.

if your income is zero and you're fine with eating cat food in retirement go for it.
Otherwise make better life choices.
 
Nester99 said:
Time to crystallize those losses?

normally a bad idea.
Can't even think about giving advice without knowing your age, $401k size, dependents and occupations/income.

I am not asking for that info on a forum like this so won't give advice other than.

It's a bad idea, your going to miss the rebound. Talk to your accountant first.
Click to expand...

Yeah, your 401k is probably down 20% compared to a month ago already, and taking out money now is just going to screw you huge in the long term once that rebound starts. Definitely a last resort type of thing.
 
I wouldn't do it

I get that you have the time to get those projects done but just don't

I'm struggling with it myself
 
I was in a unique position, i had pension from a previous job that jsut coincided with the downturn, and i was able to take a cash payment on that.

I still have a 401k so i figured it ok.
 
Terrible idea. Don't do it. This is advice from someone that's made a ton of money during the market downturn.
 
Last edited:
Why are you selling when the market is down? Look at the super low interest rate, just do a refinance with some extra cash. Make sure your salary is high enough to repay the new monthly mortgage.
 
VGEsoterica said:
At some point we may withdraw some from my wife's SEP IRA for a down payment on a house, since that's tax liability free. No time soon though. Chicago real estate sucks...so many places go full cash deals, trying to buy a house like a normal person is near impossible.

Buddy of mine sold his condo two years ago. Sold in 24 hours for 30K over asking in an all cash deal. I don't have that type of scratch to throw around
Click to expand...

30K!?
Housing is so fucked in Australia, land itself even in the cheap suburbs and small blocks is over 200K alone.
 
I wouldn't OP unless it's a absolute necessity/emergency situation. Like everyone said mine is down like 20% already so losing anymore with penalties would just about kill all the gains .
What needs fixing so bad to resort to thise?
 
been thinking of buying some stocks. if we have another really bad day then i might do it. in 2-3 years time i could end up making a ton of money.
 
This would have been a bad idea back in February. Today, it would be an astronomically awful idea.
If you need a cash bump for a house project and have decent credit you can usually get a credit card with a zero percent intro APR as a sign on bonus. As long as you're diligent and pay it off in full before the back interest kicks in that would be a win-win.
 
If you do anything with your 401k take a loan and only the absolute minimum that you would need. And that you can pay back quickly. If you withdrawal I think you get taxed like 40% on it or something ridiculous. A cash out refinance might be your best option.
 
In the future, if you want some money to play with, start a regular taxable brokerage account, dump some money into a cheap index fund, and let it ride. Later, you can do whatever you want with that money, without having to worry about penalties or putting it back in. Ofc, going forward, you should still contribute to your 401k more than you contribute to the taxable account, if you plan on living past retirement age.
 
Obviously don't pull it out. But, maybe think twice about dumping so much money into it in the future. This is the second instance in my short lifetime where I've seen 401Ks destroyed by some economic anomaly. My dad got totally fucked back in 2008 when he retired. Now, barely 12 years later, people can't retire again.

I just don't really trust it anymore.
 
SurprisedPikachu said:
YEah, you shouldn't do an early withdrawal for any reason.
Click to expand...
I just gave you a reason. To protect another asset.

In normal situations withdrawing from a 401k hurts you in the short term and long term. Under the new temporary rules that short term pain is gone, so using your 401k to hedge against short term disaster makes sense.
 
Do it OP. Blow your whole retirement fund on hookers and coke. It sounds like a great idea. You're young, life is short, so much adventures waiting for you. Live in the moment. What could possibly go wrong?
 
Last edited:
Grinchy said:
Obviously don't pull it out. But, maybe think twice about dumping so much money into it in the future. This is the second instance in my short lifetime where I've seen 401Ks destroyed by some economic anomaly. My dad got totally fucked back in 2008 when he retired. Now, barely 12 years later, people can't retire again.

I just don't really trust it anymore.
Click to expand...

I saw so many people lose huge 401k investments in 08, spooked me good.
 
Hoho for breakfast said:
I need a lot of stuff on my house fixed up, and with the CARES Act it looks like now is the time to dip into my 401K and get some stuff done. Was mostly just wondering what others think of this as I know most people with money will say to only use it as a last resort etc..but it's extremely tempting.

Is anyone else doing this? What are you doing with the money?
Click to expand...

Did you lose your job because of the virus, or do you or your spouse have the virus?

Because those are the only reasons you can do this. Not just because you want a new car.


Also pulling out money when the market is down like this is horrible anyway.

highrider said:
I saw so many people lose huge 401k investments in 08, spooked me good.
Click to expand...

And it all came back and then some, unless they retired 'in' 08
 
Last edited:
Mihos said:
And it all came back and then some, unless they retired 'in' 08
Click to expand...

It didn't. I'm thinking of two specific business where friends of mine worked. They both lost upwards of 50k. Neither was retiring. They were both advised to cash out or they would lose everything. I'm guessing not everyone was in a position to wait it out.
 
highrider said:
It didn't. I'm thinking of two specific business where friends of mine worked. They both lost upwards of 50k. Neither was retiring. They were both advised to cash out or they would lose everything. I'm guessing not everyone was in a position to wait it out.
Click to expand...

There is no such thing as 'losing everything' in mutual funds, and no financial advisor would ever suggest cashing out... For them to lose 50k in 2008, they would have needed a minimum of 300k invested even with the worst 401k eligible mutual fund at the time,, And the penalty of withdrawal would have doubled the losses.

this story doesn't add up at all.
 
Last edited:
Mihos said:
There is no such thing as 'losing everything' in mutual funds, and no financial advisor would ever suggest cashing out... For them to lose 50k in 2008, they would have needed a minimum of 300k invested even with the worst 401k eligible mutual fund at the time,, And the penalty of withdrawal would have doubled the losses.

this story doesn't add up at all.
Click to expand...

Ok. I really have no reason to make up a story about this. But I'm not a financial advisor, and I really gain nothing by trying to prove it, so..
 
Mihos said:
Did you lose your job because of the virus, or do you or your spouse have the virus?

Because those are the only reasons you can do this. Not just because you want a new car.


Also pulling out money when the market is down like this is horrible anyway.



And it all came back and then some, unless they retired 'in' 08
Click to expand...
Half true. Those are not the only reasons. In fact at the moment I don't even need to give a reason. I get your point though.
 
It's not a good idea to sell off equities in a depressed market unless it's to put food on the table and you have no other options. If you are planning on putting money into your home then just take a HELOC
 
You must log in or register to reply here.

Similar threads

Anyone else notice a big increase in neo accounts? (new accounts)
2
80
587
KanKamAndNob replied
Anyone else born on the 4th July?
21
1K
Donald mac Ronald replied
Does anyone else enjoy watching survival videos?
11
655
EverydayBeast replied
Anyone else feel that Meta is kind of a garbage company?
17
1K
Fbh replied
Anyone using a Digital Audio Player?
11
285
Cyberpunkd replied
Top Bottom