Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
Has anyone cashed out their 401k? You would have to pay a 10% penalty plus you pay federal/state taxes. Any comments is it too risky or risky not to do it?
Nice analysis. To learn more about the mandatory 20% federal tax withholding which applies to distributions from 401k plans but not IRA distributions, see the following.
Developer · Houston, TX · Member since 2017 · 161 posts · 134 votes
9y
I see this is a very old post but for what its worth....
@Lane Kawaoka, I agree with @Charlie DiLisio and have accepted millions from investors in our syndication through self directed IRAs. I haven't personally done it, but I find many investors, especially those who are corporate employees or retired, are doing it this way. Although, like @Scott Dixon, I did borrow money from my former 401K as a down payment for my first multifamily property.
I agree with @Jon Holdman, however some plans will allow for a partial rollover of 50% or less of your 401(k). I recommend you speak to your plan administrator or HR person, they will be able to provide you with the answer.