For Buyers Laura Miller Edwards Realty Group November 9, 2023
Are you dreaming of buying your own home and wondering about how you’ll save for a down payment? You're not alone. Some people think about tapping into their 401(k) savings to make it happen. But before you decide to dip into your retirement to buy a home, be sure to consider all possible alternatives and talk with a financial expert. Here’s why.
The data shows many Americans have saved a considerable amount for retirement (see chart below):
It can be really tempting when you have a lot of money saved up in your 401(k) and you see your dream home on the horizon. But remember, dipping into your retirement savings for a home could cost you a penalty and affect your finances later on. That's why it's important to explore all your options when it comes to saving for a down payment and buying a home. As Experian says:
“It’s possible to use funds from your 401(k) to buy a house, but whether you should depends on several factors, including taxes and penalties, how much you’ve already saved and your unique financial circumstances.”
No matter what route you take to purchase a home, be sure to talk with a financial expert before you do anything. Working with a team of experts to develop a concrete plan prior to starting your journey to homeownership is the key to success. Kelly Palmer, Founder of The Wealthy Parent, says:
“I have seen parents pausing contributions to their retirement plans in favor of affording a larger home often with the hope they can refinance in the future… As long as there is a tangible plan in place to get back to saving for their retirement goals, I encourage families to consider all their options.”
If you’re still thinking about using your 401(k)-retirement savings for a home down payment, consider all your options and work with a financial professional before you make any decisions.
This blog post previously appeared on https://www.simplifyingthemarket.com/en/2023/11/08/thinking-about-using-your-401k-to-buy-a-home?a=106260-312309902871c1f0d820820f58bf8fde. The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. and the Laura Miller Edwards Realty Group do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. and the Laura Miller Edwards Realty Group will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
Stay up to date on the latest real estate trends.
While it’s true that institutional investors are a player in the single-family rental marketplace, they’re not buying up all of the houses on the market.
It’s true that buying a home has become more expensive over the past couple of years, but people are still moving.
For more than 79 years, Veterans Affairs (VA) home loans have helped millions of veterans buy their own homes.
Before you decide to dip into your retirement to buy a home, be sure to consider all possible alternatives and talk with a financial expert.
Here’s what you really need to know about a few myths causing fear in today’s housing market.
The key to a successful sale is finding the perfect listing agent to work with you throughout the process.
Now that the pandemic has passed, many grandparents want more than ever to be near their grandchildren.
Getting pre-approved is an important first step when you’re buying a home.
The low supply of homes for sale isn’t a new challenge. There are a number of long-term and short-term factors leading to the current inventory deficit.
Get assistance in determining current property value, crafting a competitive offer, writing and negotiating a contract, and much more. Contact us today.