401(k) Withdrawal for Real Estate Investing

[Gabriel Starr]

We've all seen the models and read the thousands of articles that say not to touch your 401(k) until you need to in retirement. However, we also don't have a lot of control of how that money is invested and the accounts gets hit with management fees each quarter regardless of how it performs.

I am considering cashing out my 401(k) most of which is a ROTH 401(k) to purchase more real estate. I own a duplex (live in one side and rent the other) and I almost live rent free. I've seen much more advantages and bigger returns from my small down payment on my duplex than I ever have in my 401(k). Between cash flow and tax advantages, I am seriously considering getting more aggressive with real estate.

Cashing out my 401(k) is something I would've never considered, even a year ago. But looking at projections of what my balance will be in 30 years versus cash flow and equity of real estate 30 years from now and I'll say I'm starting to believe that all the hype of the 401(k) is just so the financial institutions can hold on to your cash and leverage it instead of you doing it for yourself.

It is so ingrained in us to not touch our 401(k)s that I get sick when I think of it, until I look at what that money could do in real estate. Even with taking the 10% fee and paying taxes.

So, has anyone here done this?!