Advice on pulling from 401k to start investing.
Does anyone have thoughts on pulling funds from 401k to start investing? After being on BP for a few weeks now im ready to start investing. I dont have enough reserves for a down payment. Any advise would ne greatly appreciated. Also if there are any investors in the harrisonburg, Va. Area i would like to connect.
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Dmitriy Fomichenko
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Dmitriy Fomichenko
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Chris,
unless you are at the retirement age pulling funds from your 401k will be considered early distribution, which will result in taxes and penalties (both on state and federal levels).
Two options you may want to consider:
1) If your 401k has loan option you might be able to borrow from it up to $50K
2) Setup and rollover funds into self-directed IRA. With this plan you can invest in alternative investments including real estate and much more. You can't benefit from those investments however until retirement, which is the same as conventional retirement accounts.