• MsPenguinette@lemmy.world
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    8 months ago

    Fun fact: you can withdraw from your 401k. While there is a hefty tax penalty, you still can do it. Maybe you can get a down payment on a house or pay off student loan debt. Just make sure you withhold taxes from your payout. Don’t get caught with that bill at tax season

    Especially handy if you have a job with good matching and instant vesting. Of course, this is not finacial advice, but it is an option that exists.

    • AwkwardLookMonkeyPuppet@lemmy.world
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      8 months ago

      You can use $10k from your 401k for a down payment on a house with zero penalty. If you’re married, then your spouse can do the same. So now you have $20k for a house down payment! With an FHA loan you can buy with as little as 3.5% down, which your $20k should cover. Weee!

      • Deceptichum@sh.itjust.works
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        8 months ago

        Heh, here in Australia I’d need over $100,000 for a down payment.

        Many are 20% here, so really I’d need over $200,000 just to make the initial payment.

        • AwkwardLookMonkeyPuppet@lemmy.world
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          8 months ago

          You need that here in the USA too, but with an FHA loan, or a first time buyer program on a conventional loan the percentage needed is reduced. Although they hit you with some pretty hefty fees when you take advantage of those programs. The FHA charges an up-front fee, and conventional loans hit you with PMI which equates to hundreds of dollars per month.

      • cm0002@lemmy.world
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        8 months ago

        Why even bother with a down payment, lots of loan options out there for 0%

        • EtherWhack@lemmy.world
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          8 months ago

          In most cases, it’s better to save up for a down-payment to cut off a chunk from your loan along with the portion of interest with it. You also tend to be able have loans with better options available to you.

        • Flying Squid@lemmy.worldOP
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          8 months ago

          Age has nothing to do with it. I’m 46 and I don’t have a 401k. I’ve never worked for a company that offered me one and I can’t afford such a thing out of savings I’ve never had.

    • fruitycoder@sh.itjust.works
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      8 months ago

      You can also borrow against it sometimes. Basically b3ing a low interest loan to your self with the fees being lower than the penalties

    • johannesvanderwhales@lemmy.world
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      8 months ago

      If this is your plan you’re probably better off rolling it over into an IRA, and then doing a qualified distribution. There are a number of qualifying events that can be used to avoid the penalty for early withdrawals.

    • altec@midwest.social
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      8 months ago

      Yep, my plan is to pull all the money from my 401k as soon as my employer funds are vested. Paying down debt and living a comfortable life now seems like a better bet than hoping retirement happens.

    • BastingChemina@slrpnk.net
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      8 months ago

      In Switzerland there is a retirement fund similar to the 401k from which you can withdraw if you definitely leave the country or if you want to use the money to buy your main house.

    • felbane@lemmy.world
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      8 months ago

      just don’t get caught with that bill at tax season

      Meh, I’m pretty sure the IRS will agree to a payment plan for a small monthly fee on top of the payment, which at this point is almost certainly less than what I’m paying in these fucking usurious interest rates.