In This Market, Does It Make Sense To Cash Out Your 401K To Buy A Home?
Standing by and watching your 401k shrink can be a deflating experience. Sometimes it can seem like that’s all you can do — stand by and watch it shrink right before your eyes. But with home prices beginning to rebound here in San Diego, cashing out your 401k to buy a home might be a good way to begin making a better return on your investment.
This is especially true if you’re a first-time home buyer. Unlike withdrawing money from your 401k for other reasons, withdrawing from your 401k to buy your first home often means there are no penalties. As home prices increase, so does your home’s value, which means your money is working harder for you.
Of course, you’ll need to research what the penalties and fees are for your specific 401k to see if cashing out would be cost-effective. And be sure to talk to your financial adviser to see if this option is right for you. But options are always good when it comes to your money. After all, it’s your money. Make it work for you and maybe your home.
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