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09/21/08, 10:11 PM
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Banned
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Join Date: Mar 2008
Posts: 150
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Hardship withdrawl from 401k to buy my primary homestead?
Right now I am living on my parents old grounds, not actually renting. I've never owned a home, and I have NO credit that I am aware of.
I am a Christian and don't believe you should save up for retirement. I don't even believe you should borrow money(loans). I didn't even WANT my 401k that my employer gave me!  I consider it gambling. It is almost all profit sharing.
So what I understand is I can do a hardship withdrawl to purchase a primary residence. I also need to move out soon.
Anyone done this? How much documentation and penalties are invovled? I would like to give this 401K a good whooping and establish a church-home somwhere so I can quit my job!
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09/22/08, 05:13 AM
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Join Date: May 2002
Posts: 3,773
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What kind of 401K do you have, Just because your employer has a 401K doesnt mean there is any money in it, unless you decide to put money in. MOST 401K plans require the employee to put the money in, some companies will match the money some will not. Its an optional plan you should be deciding if its use or not. YOur money view are interesting, just remembers its not "money is the root of all evil" Its the LOVE of money is the root of all evil.
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Gary in Central Ohio
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09/22/08, 06:26 AM
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More dharma, less drama.
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Join Date: May 2002
Location: Texas Coastal Bend/S. Missouri
Posts: 30,490
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You have to find out what your own 401K status is, and find out what the rules are. Some vary. Make phone calls, and visit the administrator. They will give you the forms to fill out and tell you the consequences. We do not have that information.
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Alice
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"No great thing is created suddenly." ~Epictitus
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09/22/08, 08:24 AM
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Dallas
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Join Date: Apr 2008
Location: N of Dallas, TX
Posts: 10,122
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Quote:
Originally Posted by Faithful One
I am a Christian and don't believe you should save up for retirement. I don't even believe you should borrow money(loans). I didn't even WANT my 401k that my employer gave me! I consider it gambling. It is almost all profit sharing. |
<<Shaking head>> 
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09/22/08, 09:35 AM
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Join Date: Oct 2003
Location: Carthage, Texas
Posts: 12,261
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Penalties Schmenalities...
If you truly don't believe in investing, why worry? (not being facetious)
Take the money, buy your home, and land, and start earning real equity. The day has come when paper investments could be worth nothing.
Good luck!
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09/22/08, 10:13 AM
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Too many fat quarters...
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Join Date: Aug 2007
Location: SW Nebraska, NW Kansas
Posts: 8,537
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Why do you not believe in saving for retirement?
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09/22/08, 10:32 AM
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Join Date: May 2002
Location: GA & Ala
Posts: 6,207
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How will you be able to keep a home if you can't pay for repairs/taxes when you are too old to work and haven't saved anything for retirement? Social Sec. won't go very far if it is still around and available.
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Be yourself - no one can tell you that you're doing it wrong!
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09/22/08, 10:55 AM
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Join Date: May 2002
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I'm not a firm believer in retirement, so I'm not socking away too many funds for the latter days of my life. However, I'm fortunate enough to have my farm basically paid for, plus it brings in a decent income each year from the crops. I crop share with a neighboring farmer and that brings in enough to cover the bills on the place.
I guess those who live in the suburbs/cities need the retirement plans because they don't have the luxuury of making their property pay for itself and taking care of it's owners well into their twilight yeras.
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Joy at Secretplace Farm
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09/22/08, 11:06 AM
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swamper
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Join Date: Sep 2006
Location: New Jersey
Posts: 1,030
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Quote:
Originally Posted by Joy in Eastern WA
I'm not a firm believer in retirement, so I'm not socking away too many funds for the latter days of my life. However, I'm fortunate enough to have my farm basically paid for, plus it brings in a decent income each year from the crops. I crop share with a neighboring farmer and that brings in enough to cover the bills on the place.
I guess those who live in the suburbs/cities need the retirement plans because they don't have the luxuury of making their property pay for itself and taking care of it's owners well into their twilight yeras.
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Take my word for it. If you want to keep your homestead in your old age, you need more than Social Security. Your income will not go up, but your taxes and expenditures will, even for measly .22 shells. A farm income in itself is not a guaranteed income, ask any farmer who has been toiling at all their lives. Even if you farm organically without the cost of chemical fertilizer or pesticide, the proper mechanical work will require much more fuel than conventional farming.
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United states of America
Born July 4, 1776
Died November 4, 2008
Suicide
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09/22/08, 11:50 AM
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Join Date: May 2002
Posts: 325
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Quote:
Originally Posted by jross
Take my word for it. If you want to keep your homestead in your old age, you need more than Social Security. Your income will not go up, but your taxes and expenditures will, even for measly .22 shells. A farm income in itself is not a guaranteed income, ask any farmer who has been toiling at all their lives. Even if you farm organically without the cost of chemical fertilizer or pesticide, the proper mechanical work will require much more fuel than conventional farming.
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A corporate job isn't guaranteed income either! Just ask all of those who were just laid off and those Enron employees of the past who had all their 401ks invested in their companies. Looks like some of them will be having to start over from scratch again.
Nothing's a guarantee, none of us know if we'll even be here tomorrow. Life has a way of ending at some point, many die young and some live to be very old. But the majority of us can and do work up to a very short time before we pass on.
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Joy at Secretplace Farm
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09/22/08, 01:25 PM
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Join Date: May 2002
Posts: 3,773
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401K dont have to be invested in the company you work for. Any good 401K should be diversified across several funds. You can move your own 401K where you want it, you can just cant take money out without a penalty.
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Gary in Central Ohio
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09/22/08, 03:48 PM
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Join Date: Jul 2007
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I borrowed a little from mine to pay off our place. When my husband quit his job so we could move, we had to count it as income and we had a 10% penalty on top of the regular taxes. We ended up paying $4,000 in taxes on $16,000 we took out. If we had drawn it out as a loan, we paid 10% interest over 5 years, which was about $300 a month. I would probably have gotten a traditional loan instead if I could do it again.
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09/22/08, 04:03 PM
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Incubator Addict
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Join Date: Feb 2005
Location: Greensburg, PA
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You say you don't believe in saving for retirement, do you believe in saving to purchase a piece of property? You may want to consider it if the 401K doesn't hold the amount you think it does, or if the penalty will lower the payout below the purchase price of a piece of property.
And, not that you asked, but I think that while God will provide, he does it by giving us the tools to provide for ourselves. (Meaning, things happen, so I hope you do have something to fall back on, even if it isn't money.)
Kayleigh
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09/22/08, 06:07 PM
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Join Date: Jan 2003
Location: Bel Aire, KS
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Why do you consider saving for retirement or investing in a 401 k an unchristian thing to do? Or gambling? Even God said to take care of yourself.....
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Ted H
You may all go to Hell, and I will go to Texas.
-Davy Crockett
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09/22/08, 06:19 PM
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Join Date: Aug 2008
Location: Indiana, USA
Posts: 12,673
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How do Christians feel about taxes? 
You will be charged income taxes on the 401k withdrawl, plus and extra 10%, if you are under age 59 1/2.
Marty
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09/22/08, 07:47 PM
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Volvo With a Gun Rack
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Join Date: Apr 2007
Location: Texas and Missouri
Posts: 2,513
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Quote:
Originally Posted by plowjockey
How do Christians feel about taxes?
You will be charged income taxes on the 401k withdrawl, plus and extra 10%, if you are under age 59 1/2.
Marty |
The tax code allows for penalty-free withdrawls if you meet the hardship rules.
So the 10% penalty may or may not apply.
Tim
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Taxes, in excess of what are needed to fulfill the constitutionally authorized activity of government, are theft
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09/22/08, 09:23 PM
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Join Date: May 2003
Location: Zone 7
Posts: 10,559
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I have seen a lot of people with this type thinking but most were wearing saffron robes.
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Agmantoo
If they can do it,
you know you can!
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09/23/08, 08:41 AM
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How What Where Unknown
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Join Date: Aug 2007
Location: Ontario\Quebec border Right around Here --------------------->
Posts: 549
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Quote:
Originally Posted by agmantoo
I have seen a lot of people with this type thinking but most were wearing saffron robes.
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Actually the concept of investing being a sin is prevelent in several religions, with the Muslim faith being the most prominent, it is known as riba.
Here is a good paper on the subject.
A Short Review of the Historical Critique of Usury
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09/23/08, 09:09 AM
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Unapologetically me
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Join Date: Mar 2003
Posts: 12,632
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I borrowed from my 401k to buy a pickup.
The way the market was and is going, it just made sense to me.
Now instead of losing money on that part, it's making 6%.
I know, I know, I should leave it alone..........
But the odds of me living to retirement age are slim anyway, so I think it'll be ok.
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Whenever you find yourself on the side of the majority, it is time to pause and reflect.
Mark Twain
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Enforced tolerance is oppression
ΜΟΛΩΝ ΛΑΒΕ
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09/23/08, 09:15 AM
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Join Date: Jun 2008
Location: East Tennessee
Posts: 202
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Quote:
Originally Posted by Labrat407
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Unless I'm mistaken usury does not mean investing. It has to do with lending and intrest from the lending.
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