I want to take a 50k loan from my 457 retirement plan to buy a rental property. Is this common or recommended? I still have approximately 25 years to until I am eligible for retirement.
Investor · Broward County, FL · Member since 2018 · 1k+ posts · 938 votes
6y
@Ricardo Esqueda
If you take a loan out of your 457 for an investment property you will have to repay it within 5 years.
With the CARES act you can take a loan up to $100k but also you can take a distribution up to $100k that will be tax free if reimbursed within 3 years in any QRP. You need however to be able to show that you were financially impacted by COVID.
So you may want to look at the distribution option to withdraw money from your 457 and redeposit it into a self directed solo 401k or IRA and then invest into the real property directly from this plan. If you have enough money in your 457 you can do both distribution and loan to get up to $200k out.