Has Anyone Cashed Out Their 401(k)?

[Marbles]

My comment wasn’t about logic or arguments. I simply asked what you were trying to say with your math in the context of you mentioning a mortgage.

Only that it is not as terrible as taking out a loan at 30-40%.

As you demonstrate, still not as good as leaving it alone.

The 30 year mortgage was simply as an extreme example to demonstrate the difference between a one time fee vs an interest rate.

 

[One300wsm]

Interesting video

 

[Davyalabama]

No, I keep putting as much as allowed into it!!!!!! I max out IRA's too. I don't have a mortgage on anything, houses nor condos. I pay cash for vehicles. I pay cash for any vacations. I'm not into debt, period.

 

[JBradley500]

I cashed out about $450 from a 401(k) when I was 18, and I still regret it.

Most people are financially illiterate. I'm no expert, but just knowing the basics can take you a long way. On average, your money doubles every 7–8 years when invested in the market, and that fact alone motivated me to start investing early and let my money work for me rather than the other way around.

Steps we try to follow:

1. Contribute enough to your 401(k) to get the full company match.
2. Contribute to and max out an IRA.
3. Max out your 401(k).
4. After that, I'm not as knowledgeable, but I put extra money into a brokerage account. Others may choose to invest in individual stocks, buy CDs, or pursue other options.

Many people don't have enough income, but plenty also live paycheck to paycheck while making payments on new trucks, campers, side-by-sides, bigger houses, and other luxuries, yet have no plan for retirement or even a period of unemployment.

Be smart.

 

[NRA4LIFE]

Another thing to consider is taking a lot of money out after 63. Any income that you make (company matches and gains) can affect your Medicare payments at 65 if you reach certain levels. Something to keep in mind.

 

[Rich M]

I get your point about using it (enjoy what you have worked for) and not loosing but I do think there are avenues to set up to ensure the government doesn't take it all if the time comes for the nursing home. For myself, I have four kids and do find value in leaving them something when the times comes. It can be a balancing act of spending it while young but not having it hang over your head that you won't be able to afford a comfortable retirement.

One other thing I keep seeing in the comments is that people keep living longer. According to google the average life expectancy in the US has decreased since 2019. I am sure some of it is covid related but I do think it is a trend.

My uncle and a diff guy, buddy both had a lineage issue w heart problems and the men dying in the 50s. Uncle is 82-83, buddy is 50s and living thanks to blood thinners.

Folks are aging like never before w blood thinners and pace makers.

My wife and i are factoring in old age care into our retirement plans.

We closed a 401k account to buy a foreclosed condo to have a place to live during a rough spell. Bylaws wouldnt let us rent it so sold it for twice the cost plus rehab $$. Did okay. Currently maxing out 401k.