Metrowest Area Homes' Blog
501 Coronation Dr, Franklin, MA 02038
Your 401K is a great resource of investing for retirement. Many people use their 401k’s as a part of their overall investment strategies, pulling money out of it when it’s needed. When you’re ready to buy a house, you may think that pulling money out of your 401k for a down payment is a good idea. But think again.
Although you should always speak with a financial professional about your money matters, the bottom line is that is probably not the best idea to use your 401k to supply money for a downpayment on a home.
First, your 401k funds are pre-tax dollars. That means that you haven’t paid any taxes on these funds. Your employer will often match the amount of money that you put into your 401k, as an incentive to help you save money for your future. You need to keep your 401k for a certain amount of time before any funds in the 401k become available to you without having to pay any kind of penalty. If you decide to take on the penalty, you can often face a cut to your employer’s match programs as well. This is why you must make this decision wisely.
Anyone under the age of 59.5 pays a penalty of 10 percent to take the money out of the fund. In addition, you’ll now need to pay taxes on this money, because it becomes a part of your adjusted gross income.
If you are looking to invest in a property, there may be other options for you rather than pulling money out of your 401k. While some plans allow you to borrow money from it. However, if your only option to get money to invest in a property is to pull money from your retirement account, it may not be the best time to invest in property for you.
Keep It Separate
If you’re younger (say in your 30’s or 40’s) your best option is to have a completely separate account that is used to save for a downpayment and other expenses that you’ll incur when you buy a home. In this sense you aren’t spreading yourself too thin as far as investments go. You should compartmentalize your money. Buying a home is a large investment in itself. Home equity can also be a good source of a nest egg in later years when you need it. However, even if a property will be an income property, it’s never smart to take from one investment account to provide for another unless you’re shifting your focus. You don’t want to reach retirement, only to see that your funds have been depleted and you can’t retire as expected.
For most people, the idea of moving conjures up dread and stress. There are things to sort, boxes to pack, fears that the dishes might get broken because you didn't add enough padding to keep them safe, and concern that you'll lose something, miss something, forget something.
But moving doesn't have to be all stress and bother. You can make a game of moving and have some fun while you do it. Look for the easiest ways to arrange things so that both packing and unpacking go more quickly.
- One down - leave things as they are: If your dressers are full of clothes, instead of removing the clothes and repacking them in boxes. Just leave them in the drawers. Grab some plastic wrap—available at most moving rentals stores, big box DIY stores, and office supply outlets—and wrap the furniture to hold the drawers in place. If you're not sure how to complete this yourself, ask your movers to wrap it for you. And use a garment box for hanging clothes. Just grab a group of hangars and move them from the closet onto the bar in the box. They’re all set to transfer back into the new closet.
- Two or more - leave utensils and flatware in their trays. Find boxes that will fit the whole tray but slip a plastic or paper shopping bag over the entire thing before you slide it in the box. That way, the bag holds the items in the tray and protects one tray from rubbing on another. When you get to the new home, just move the trays directly into the new drawers. Easy as pie!
- Three to go - Race to see who can fill the most boxes. Give kids easier options such as games and books and other flat objects that fit into boxes easily. And have a bigger box for stuffed animals and dolls.
- Four on the floor - use smaller boxes. A tendency for novice movers is to fill large boxes that are then impossible to move. The problem is, you often fill large boxes with a mixture of things that may not even belong in the same room, merely to fill the box. Using smaller boxes more strategically might give you more boxes overall, but will save you time, effort, and an aching back when you reach your destination. Label each box as you go, then stack them like a Jenga puzzle until moving day.
- Five-minute rule - if you're trying to pack yet keep your regular life flowing smoothly, spend just five minutes at a time packing. Grab a packing box and fill it up, then go back to putting on makeup or finish your workout.
If moving seems daunting to you, download a moving app to help you stay organized and keep you moving.
45 Summer St, Natick, MA 01760