What to do with 401k through employer

Question

David Thompson · Answer

Hi Aaron,

I wrote a few blog posts on this.  To bad you are not in a community property state because there is a very creative way that most folks are not aware of to gain access to your 401K while still working.

https://www.biggerpockets.com/blogs/9145/63896-3-c...

Dmitriy Fomichenko · Answer

Thanks for the mention @Jeff Greenberg.

Aaron, if I were you I would take advantage of the matching and contribute up to that amount to your 401k. This is free money, in your case it is $6,000. In essence you are getting 50% return on your money, guaranteed. Would be unwise not to do that.

As Jeff mentioned if you are with the current employer you typically can't rollover those funds into self-directed IRA or 401k until you are either no longer employer or reach a retirement age. However, your plans may have loan option allowing each of you to pull the loan our from your respective accounts up to $50K or 50% of the balance, whichever is less. You may want to inquiry with your plan administrator if such provision exists in your plan.

George Blower · Answer

@Aaron Barrett

In order to borrow the full $50,000, your 401k needs to have a value of $100k. To learn more about the 401k loan rules, see the following.

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans

Jeff Greenberg · Answer

It not usually possibly to use your 401 k to invest in alternative investments.  You can however take a low interest loan from your 401k and do whatever you wish with it.

You can also put up to the matching limit into your 401k and put your after tax funds into a self directed Roth.  I am not an expert in this area and suggest you consult one.  @Dmitriy Fomichenko

What to do with 401k through employer

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