Originally posted by @Josue Vargas:
Thinking on withdraw most of my 401K account (no longer employed with that company) and invest in RE property. I have over 100K, also have lost over 10K in the past 13 months. Just want to have more control of my money and invest in something I'm sure will get at least 6% invest return on the long haul, if not more. What are my options? Get tax penalty and move on? I have heard about Self IRAs but not sure how that will work on my situation. I I'm paying my primary residence and this is merely an investment "switch" from my 401K. The properties that I'm looking, after all the expenses, give me cash flow of $50/month, maybe less not counting on taxes for the rent income... Any help?
Isn't the long-term return on the stock market 7%? If you have money in a stock portfolio, you have to have a certain comfort level with market volatility. Buying and holding stocks should get you that 7% return over the long term. As you grow older adjust the allocation so its more conservative, so your portfolio is not as sensitive to market volatility and then cash out after retirement. As long as your 401k is well diversified and allocation is adjusted periodically, I wouldn't touch it. Cashing out your 401k now I feel is not worth the penalty and fees, especially for a rental cash flow of $50/month. Btw real-estate and rental rates are also subjected to volatility in the long run.
If you have a good credit score, why not try other funding options that are listed on biggerpockets or even have friends/family contribute? This way you have your 401k intact and also own investment property.
