Is It a Bad Idea to Cash Out a 457b Penalty-Free to Pay for a House?
2,778
2024-07-08に共有
Jump start your journey with our FREE financial resources: moneyguy.com/resources/
Reach your goals faster with our products: learn.moneyguy.com/
Subscribe on YouTube for early access and go beyond the podcast: youtube.com/c/MoneyGuyShow?sub_confirmation=1
Connect with us on social media for more content: moneyguy.com/link-in-bio/
Take the relationship to the next level and become a client: moneyguy.com/work-with-us/
Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life.
コメント (12)
-
Finally, some love for the 457, the best retirement account out there!
-
Love how Brian tries so hard to say the Bowling point.😅😅
-
The bowling point will never not be funny 😂
-
Today. Today is the first time I discovered this show and “FOO”. WOW. This is what I’ve been looking for.
-
Why not just do some simple math-what is the % the 457 is earning for them vs. what would this interest rate be taking out a mortgage loan? I retired 14 months ago and have a 457. It was earning 12-14% for me. Mortgage rates are significantly lower than that. Even better, wait til rates come down and rent for awhile longer. Not a good time to buy
-
There are but a few reasons you can cash out a 457b (while still employed) and purchasing a home usually isn’t one of them….
-
I understood the question as: Is it actually smart to “earn in fiat, save in _______?” The tax question is interesting too.
-
Based on my simulations *pushes up my glasses*, if you have investments worth over 100% of the house (enough to pay for the house and the taxes associated, so 141% of the house in your 457), its financially more optimized to only withdraw a 20~30% for a down payment and get a mortgage in most situations. There's very few situations where buying in cash is better than renting or a mortgage. It'd have to be unrealistic situations, like the home appreciating faster than the market for 15 years straight, or rent going up over 7% every year, or a 15% mortgage rate (assuming you can keep up with such a mortgage rate). Its even better if you take the tax penalty every year and withdraw from your 457 and use that to pay for the mortgage payments. In other words, their 457 is worth so much that the snowball effect of compound interest trumps paying in cash or renting, and the most optimal solution is do a 20% down payment, and reinvest the extra money into a ROTH IRA or normal brokerage account.
-
Superficially, this is a bad idea unless the caller has really bad credit. Historic market returns still beat mortgage interest, plus you get a tax break on the interest you pay on a mortgage. I think in his/her mind, taking a tax penalty now means avoiding paying more in taxes when their income goes double. Without seeing precise numbers and the exact situation, I find that unlikely, to say nothing of whether the income will actually double for the longterm, e.g. don't spent money you don't have yet.
-
Someday, when we are all grown up, “Millionaire vs Millionaire household” will be better defined in all these statistics. Example (the average millionaire crosses over into millionaire status at the age of 49”. Are all these people single?
-
big regret later the money will not grow in the future, big mistake
