Cash out IRA for REI??

[Sean Connolly]

I am 30 years old with 75k in my IRA (not a current employer 401k program). Should I cash out what I can to purchase a multi unit investment property for buy and hold? Thanks.

[Steve Vaughan]

Hold on there, sparky. Is this a Roth IRA or traditional? You can pull out contributions to a ROTH tax and penalty-free. The penalty is 10% + your tax rate on a traditional. The penalty in 10%, not the tax. This isn't a game of horseshoes where close counts.

In general, the answer is NO.  Even with a tax/penalty free ROTH distribution, you will be giving up 30+ years of tax-free growth.  I would not 'borrow' at a rate of 35+% to scratch my RE itch.  Save up and find the money elsewhere.  I think you'll be glad you did when you look back @Sean Connolly Cheers!