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Should You Take Out Your 401(k) to Pay Off The House?

Have you ever thought about paying off your debts with your investments? For many of you, one of your final debts is your home loan and you just can’t wait for the day when that massive debt is paid off and you are 100% debt free. Over the years, your retirement account has amassed into a decent chunk of change, but recently, you have not seen the benefits of your investment.

In fact, your retirement fund might even be worth less than what it was 5 years ago, so why not just take it out and pay off the mortgage?! At least it would keep you from paying all that interest on your debt, right? While I agree that it would be nice to pay off your house, my gut reaction is to leave your investments alone. But let’s dig into some numbers and figure it out!

Your Scenario

In order to accurately answer this question, we really need to have a sample scenario. Let’s work with the numbers below:

  • Home Value: $90,000
  • Remaining Mortgage: $60,000
  • Monthly Payment: $500 (15 year loan with 12 years remaining)
  • Mortgage Interest Rate: 5%
  • 401(k) Value: $50,000
  • Expected Future Growth of Investment Fund: 8%
  • Tax Bracket: 25%

Take The Money Out and Pay Off The House

So what if you took the money out of your 401(k) and put it toward the home loan? Based on our numbers above, you might expect that you’ll simply remove the $50,000, dump it toward the principle of our home loan, and have only $10,000 remaining, but this is not correct. You’ve forgotten about a little thing called taxes.

If you earn between $70,700 and $142,700 (including the 401(k) deduction) as a married couple, you’ll have to pay a 25% tax on that 401(k) withdrawal. Also, if you are less than 59.5 years old, then you need to pay an additional 10% as a fee to the federal government. With these taxes and fees, your investment account is now worth only $32,500.

If you put that lump sum toward your mortgage, you’ll still have a balance of $27,500, which will take you another 5 years to pay off in full. So, at the end of the 5 years, you have no retirement savings, but your house will be paid in full with a value of $100,000.

Your Net Worth After 5 Years: $100,000


Keep The Money In Your Retirement Account

What if you just kept paying your regular house payments and allowed your retirement fund to grow at 8%? After the 5 years, your mortgage would dip down to about $45,000 and your investment account would rise from $50,000 to $75,000. Assuming your home is now worth $100,000, that means you have $55,000 in equity, which gives you a net worth of $130,000.

Your Net Worth After 5 Years: 130,000


The Best Plan

Based on the example we used above, it is clearly evident that removing your 401(k) to pay off the mortgage is not a good idea. Even though it seems like you’re earning nothing on your investments now, they will most likely grow in the future and far outperform the value in your home.

Have you ever thought about removing some money from your investments to pay off your home a little faster? What is your opinion now that you’ve read this article?




My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Definitely never thought about it. My mortgage is at need to touch it ever. I’m confident my investments, qualified or not, will always outperform 3%. Would I rather pay 3% or 35% shouldn’t even be a question. I’m assuming anyone that considers it is forgetting the penalty?

    • I’ve heard about this recently because people aren’t seeing their investment values go up. They figure that they’d be better off putting the money toward their house. Initially, it sounds good, but like you said, after the penalty, it really doesn’t make sense.

  2. I am with a blinkin. On top of that I don’t think I’d ever raid my retirement money for any goal. I want my retirement to be safe and sound so I can get there as soon as I want to.

    • Yep. That retirement money is definitely important for the future. I would advise that people leave it in their investment accounts almost 100% of the time.

  3. When I read the article title, I couldn’t help but say aloud, “OH, noooooo!” In general, it’s a bad idea, but in my specific situation, it’s an even worse idea. We’re in our late 30’s, we started our retirement investments late, and cashing out our investments wouldn’t even make a 10% dent in our mortgage balance. I’m the only one with a traditional retirement account (403b), and husband has a pension he pays into…even if the state allowed us to cash out his pension (which they wouldn’t) & put it towards the mortgage balance, we’d still have a mortgage greater than our current home value. Harumph. Bad idea on so many fronts.

    • I think that the younger you are, the worse of an idea it is. Think of all the years worth of compounding that you’d give up!

  4. I am not sure where this sample scenario house is located at but it is definitely not comparable to the east coast house prices where we live in. My wife and I paid off our home in full earlier this year and it IS a great feeling. BUT, I would agree with all, it is always almost a bad idea to cash out a retirement account to payoff a house mortgage. (We did it with our income+saving combo so we did not touch the retirement accounts.)

    • Haha. My sample scenarios are typically based in West Michigan where properties are cheap!! 🙂

  5. I’d never touch my retirement unless there was some catastrophic reason to do so. The only time I might be tempted would be if I still had that mortgage debt and was approacing traditional retirement age. That is entireley hypothetical because I have no intention of owing a mortgage anywhere close to that age. You’d also lose any tax deductions on mortgage interest if you paid it off in the above scenerio. I agree with you, don’t touch the retirement!

    • Thanks for the comment Kim! I agree with you on this one. My retirement funds are going to stay right where they are for a very long time! 🙂

  6. I think that if the mortgage is affordable, it’s better to just pay a little more each month and pay it down quicker – not withdraw retirement savings. And on that note, I think I need to move to Michigan if houses are under $100K!

    • Lol! Yes, West Michigan has lovely homes for less than $100,000. 😉 Need help packing? 😉

  7. I am pretty sure the fees and taxes of taking out my retirement money would prevent me from ever considering it. It’s amazing how big of a difference it is.

    • For sure. That, and the fact that that money will never have a chance to see compound interest. That is the eighth wonder of the world you know.

  8. So how about a different scenario… Instead of attempting to pay down or off your mortgage, what about paying off credit card debt and starting with a clean sweep? What do all of you think about doing this?

    • Sounds like it’s time for a new article! 😉 Maybe I’ll tackle this one next Monday.

  9. Just like the market, I think that timing happens to matter here.
    I know of a person who decided back in 2002 to cash out enough of his retirement savings so that after taxes and fees, he was able to payoff his mortgage, and still have retirement savings left over. Not to mention he was still young and also enjoyed his work.
    On the opposite side of the house, I feel like I did this myself to payoff our debt except for mortgage, and found ended up having to get some very much needed dental work (literally teeth shattering in my mouth when I was eating on a few occasions). Coincidentally the cost pushed us back up to almost the same amount of debt that we had prior to using a 401k that was cashed out (and could have been transferred over to the new company that I worked for).
    Of course, I feel this was a necessary evil and the timing worked out well. After all, doubling our debt so that I could eat without having to put my food in a blender in order to eat would have been the alternative, not to mention the cosmetic results of not smiling unless I covered my mouth out of sheer embarrassment.

    • That is a tough call. And, of course one answer is not always 100%. You just have to do what makes sense for your goals in the future, as well as what’s necessary in the present. Thanks for the comment!

  10. In the scenario you gave it makes complete sense to never touch the 401K, and I have never touched mine for the record. But if that person had just enough to pay it off completely and then invested 75% of their income into 401K, IRA, and investments after 5 years the networth might be way higher than 130K something close to 280K. Just food for thought.

    • Great point RichUncle EL. I actually considered putting this into the article, but I felt that it was already full enough for one read. Looks like I’ll have to address this in a post soon! 🙂

  11. I am just getting started on the path toward frugal living/saving money/actually thinking about my non-existent retirement plan. Ahem…anyway – I don’t have an IRA but I would not use my retirement savings to pay off my house. I don’t have any educated reasons, other than it just doesn’t seem wise. And even thinking about trying to save 75% of my income makes me jittery. Thanks – very helpful post!

    • Glad you liked the post Charlotte! Keep coming back and I’m sure you’ll learn more! 🙂

    • I too was in the same position as you. I would soon find out it was imperative to save what I could. I’m trying to target saving 50% or more of my income before I hit retirement age.
      Sadly I’m currently only saving 15%-16% of my income, but that’s up from a low of 0% just 12-14 years ago now.
      I also once read an article from a couple that said they were teaching their children that there were only 2 types of income: 1) income you work for and don’t spend any of your take-home, and 2) income that has worked for you and you can spend. That’s 100% savings plan, which seems completely insane … wish I’d have done that back when I was young and living at home instead of after I already had created my own financial obligations. 🙁

      I wish you the best of luck in your endeavor!

  12. I think that the key is really the 10% penalty. You’d be losing $5,000 just to convert your 401k to cash. I can’t ever see dropping 5 big ones like that.

    • Great point JP. When you think of it as $5,000 rather than “just 10%”, it seems like a much larger loss! Thanks for the comment!

  13. The 401 K plan is something that you have to get. It will help you to secure your future when you retire.

  14. I am seriously considering thi right now. I owe 360K on a 30 year loan at 4.75%. The bank lady told me that I may need to lower by 30K ( I have 75k) on roth 401K and I would qualify for a 15year at 2.875 which means I will be paying 200 extra a month but my mortage will be paid off by the time I am 45. I can then move to FL !
    Whats wrong with this it all sounds good to me, please open my eyes if I am wrong !!

    • Typically, the numbers just don’t work out in favor of paying down the house mortgage. I’ll do my best to send you an email in the near future after I do some further analysis!

  15. I think a lot of people forget a couple of things…1st the 10%penalty is
    Tax deductible. 2. Once you pay off the mortgage you then continue to make payments back to an account to yourself. 3. If the economy goes bad, you won’t have a house payment and you won’t lose on the 401k money you had. 4. If the economy goes bad you won’t lose your house if you lose your job.

    Foo for thought! Would like to hear responses.

    • Unconventional, but important points Michael. Everyone assumes that the 401(k) will go up in value, but I can easily see it taking a plunge in the next 2 years (article coming soon on this by the way). The only real negative I see to this approach is the non-liquidity if you don’t have a proper cash reserve. It’s definitely not advised, but if something happens where you run out of cash, you could use the 401(k) as your fallback. It’s tough to do that with a house (in other words, it’s a less liquid investment). Great comment though! I’d love to hear more responses to your point as well!

      • My work group has been told our jobs are moving to Texas. So after 20 years with the same company I am unable to move and will be getting laid off and taking the severance pkg. I have $183,000 in a 401k and I owe 100k on my mortgage. My monthly payment is 800.00. Do you think that it would be a good idea to take the tax hit and cash in my 401k to pay off mortgage. Figuring roughly 38% hit so will pay ~69,000 in total taxes and penalties. If I continue to pay mortgage at 800.00 a month with 28 yrs. left (336 months) it will cost me ~$268,800 in total money paid or $168,000 in interest. if I invest 500.00 a month for 336 months I would have saved the same $168,000 not including growth.
        Should i pay off my mortgage and be debt free or is it a mistake to do this.

        • Hi Bill. I think you’re jumping the gun on this one. The first thing you need to do is find work somewhere else and downsize your life a little. I would rather see you sell your house and rent a small place (if money gets tight) than to throw away your entire retirement fund. That money, if left alone, could turn into a million bucks someday. If I were in your situation, I would do everything possible to keep my 401(k) money where it was.

  16. Hi Derek,
    I will be 59.5 years old this year. I have 25 years left on a mortgage loan at 5.25%. The balance on my Mortgage is $142,00. I have just over $500,000 in retirement savings.

    I will probably sell my house by the age of 65 because it requires a lot of upkeep, both inside and out.

    I am considering liquidating part of my retirement savings to pay off my mortgage. Is this a good idea, or should I refinance my mortgage (perhaps to 15 years) instead?

    • Hi Bev. I would never flat out tell you, “this is what you should do” because there are so many variables that I’m sure I don’t know. But, as a rule of thumb, I would almost never take money out of my retirement savings to pay off my house. I would much rather refinance my loan and let my retirement fund grow as much as possible. It’s great to be debt free, but you could much easier do it by selling your house (as you mentioned) and downsizing later in life.

  17. Hi Derek
    My wife is 52 and retired with a lump sum of 317k, which is in a principle protection 401k earning about 2%. We have 12 years left on a 4.25% mortgage of 120k. I earn about 40k per year and we have no savings other than her lump sum. She works part time and earns about 14k per year.Two years ago we backed out of selling the house for 180k and our realtor says it’s worth more today. We are considering taking 2 withdrawals from her lump sum, one for 50k now and another next year for the remaining balance to pay off the mortgage. We need to reduce monthly expenses. Does this plan make any sense?

    • Hi Jeff. I’m really not in a position to give you any advice on paying off your home with your retirement money (since I’m sure there are more details than I’m aware of), but just like my article says, it almost never makes sense to pull money out of your retirement fund to pay off the house. Have you ever thought about selling the house and downsizing to a place you could pay for with cash?

  18. Hi Derek,
    Enjoyed the article and have always believed the same until now. Wife’s 401k from previous employer is stagnant with few options for investing and with 2 young kids and my wife staying home to raise them it is awfully tempting to cash it out to restructure mortgage while rates are low to have a lower payment allowing me to invest more into my 401k and have a cushion of space for diapers and formula.

    • Sounds enticing I understand, but what about the penalty? Losing a quick 10% is actually a pretty big hit. There must be something your wife could invest in that has shown growth over the last 5 or 10 years.

  19. What do you think of this scenerio? My husband sent this idea to me, but cashing in a 401K seems dumb, but I am not sure how to make him understand.

    “You know what I was thinking. We could take that one investment account that has 101k in it… cash it out and pay that much toward that house. We would have to pay tax on it and you have the 10% penalty – but I started running numbers….

    101k – tax = roughly 28% and 10% penalty — so 28k tax we have to pay and 10k penalty. Netting us about 63k.

    63k takes roughly 10 years off of our mortgage.

    10 years * 12 payments a year = 120 payments * 2402 = $288,240

    So we knock out 288k with a 63k payment — so it saves us 225k.

    Who cares about the stupid penalty, I have made enough house money in the market that it doesn’t even come out of our pocket. Isn’t this a no brainer????”

    • Hi Jennifer. This sounds very well thought out, but the math just doesn’t make sense. With interest rates today, you would at most end up paying double the value of the house over the full term of the loan. That means that if you bought the house for $100,000 at just below 4% interest, you would end up paying $200,000 for you house after 30 years. So, paying $63,000 and it pays off $288,240? That just doesn’t add up. At most, I would say that you’d be paying off a little less than $100,000 with that $63,000, which means that you’re putting less toward your house than what was in your investments, plus you have forgone any future interest that would have been earned on that money. I’m interested to hear what you find out. Please get back to me and let me know!

  20. Hi Derek,
    I am 58 and my wife is 60. I plan to retire at age 60.
    I have $380k in my 401k and I owe $122k on my home interest is 3 1/2 % and payment is $720 a month not including tax/insurance. 28 years are eft on the loan.
    I will be receiving about $3200 per month from my employer retirement plus whatever I need from my 401k funds. I will be taking SS at age 62.
    Will it make sense to pay off the loan? using the 401K funds?

    Thank you kindly.

    • That is a great question Raphael. As I stated in the article, I would almost never suggest pulling out your retirement money to pay off your house, and this is my feeling toward your situation as well. Keep in mind that I am not a financial advisor, but I bet they would tell you to keep the loan active and leave your 401(k) money where it is (and I would agree). If, when you retire, you don’t like the loan, I would suggest downsizing instead, or get a very cheap rental. That $380k will grow rapidly because it’s such a huge chunk. Let that baby grow!

  21. Hi Derek I’m really enjoying all your advice!! I currently pay $1000 extra on my 15yr 3.75% mortgage every mo. Total pymt $2500. I’ve been doing this for 20 mos. now. I’m 45 single no kids. I have a small savings, 2 older low mileage cars and no debt. My mortgage will be paid off in late 2017 if I keep with my current plan while contributing 17% to my 401k ($135K bal.). If I shift now and lower my 401K contribution to 8% (I plan to increase that by 4% each yr) increasing my total mortgage pymt to $3000 (pay $1500 extra per mo.) I can pay off my mortgage in late 2016 a year sooner. Do you see any huge holes in this plan? My current 401k ytd return is 11.9% (which could change at any time) however I will be able to save $30000 in cash per yr (and max out my 401k)as soon as my mortgage is gone. Any info would be greatly appreciated thank you!

    • Hi Bostongirl! So with your new plan, you’ll be able to pay your house off just one year sooner? I doubt you’ll be saving that much in interest. I honestly like your current plan of investing more of your money elsewhere. Although, I would really diversify my investments if I were you. Putting every penny into your 401(k) is pretty risky.

  22. Hi Derek, I’ve been reading through this thread with great interest and have a related scenario that’s a bit different than most with regard to distribution to purchase property.

    I’m 44 and currently have just over 200k between 401k(s) and Pension. I have no debt beyond my home (which is worth more than I owe and could be sold at break even pricing), and I’m living well.

    But, the issue I have is my zero confidence in the US economy future and along with it, stocks, bonds and retirement funds. I fear utter collapse and am contemplating expatriating and putting my money into tangible goods/properties in S. America.

    I’m a US citizen (born and raised), my fiance is Brazilian. We currently own 6 rental properties in Brazil and she is living there now quite well, is basically retired (beyond the property management duties), and even supporting another family member on the current cash flow.

    I’m here in the US, working, but on the cusp of losing my current employment due to a takeover/buy-out. This loss of employment will provide me full access to my 401k/pension for early distribution. I will also receive about 6 mos in overall severance pay – another good chunk of change – which gives me time to contemplate, and/or monies for emergency funding.

    I know your stance is usually not to touch retirement investments (for good reasons, I might add), but I’m wondering what your thoughts might be on cashing out my 401k(s)/pension, paying the related penalties, and putting the resulting cash into additional rental properties in Brazil (purchased outright with the distro’d funds).

    I’m meeting with my accountant this week, but thinking that after penalties/taxes and at current exchange rates, (just over 2 times the US dollar in Brazilian Reis), this will give me somewhere in the range of 200k Reis – more than enough to purchase a few more rental properties, nicely augment the existing rental income and allow me to move to Brazil and retire myself… quite early.

    I had planned to do this later in life, but the current economic situation has me thinking the plan should be accelerated and done now, while these accounts remain solvent and the dollar is still strong.

    While I realize the penalties are enormous, how much confidence should we really have in the future of the US economy and existing retirement plans if the entire house of cards collapses? (it seems imminent).

    Additionally, since I am actually using this money for retirement (albeit in a different country), does it make more sense than the typical scenarios of paying off a mortgage? I have no need to pay off my mortgage here. I plan to sell or rent my US property.

    Would love to hear your thoughts on this bit of strangeness injected into your blog. Thanks so much!

  23. It is pretty interesting to read over this article and see all of the comments. I agree with you that there is VERY few and far between scenarios where it makes sense to actually take from your 401k in order to pay for bills even paying off a home. I also noticed that someone mentioned paying off the house with a 401k and then just pushing 75% of what they make back into the 401k for a couple years to get the 401k back up to speed. 1- that really isn’t possible because you have restrictions on how much you can actually contribute to your 401k or IRA and it isn’t 75%! Two everyone always has the intentions to do things like that and it for the most part never pans out! I think the commenter has a good idea but is going about it the wrong way. Instead of taking out from the 401k and then pushing hard to contribute 75% back to the 401k for a few years (which I already mentioned isn’t possible). Why don’t you just push 75% to your mortgage payment? Obviously 75% might not be possible but honestly why not put as much as possible to your mortgage and not hurt your 401k at all? Plus you won’t get hit with a penalty for early withdrawal from your 401k. There are so many things to take into consideration but your retirement is a very important issue. One day you are going to need a lot of money because for whatever reason you either can’t work anymore or are just wanting to retire. I’d make sure that your retirement plan is set in place. Wondering if you should pay off your mortgage is important but do you have a retirement plan? Don’t hurt your retirement. One of the best things you can do for your retirement is to plan for it and stay up on it.

    • I’m with you Nick. The retirement fund is quite important and should be funded always. I am currently funding mine while paying down my mortgage. Once the mortgage is paid off, I’m going to put my loan payment money toward other investments. I may just be able to retire by the time I am 35 years old. 🙂

  24. 401K is not a good option and this is my personal opinion plus have explore multiple blogs and articles which have highlighted that 401K is not a good option.

  25. I am considering this move as I am drawing Military Retirement, Social Security and working full time for corporate pay. I am 67 and putting 25% of my pay in my 401K, I owe between 45 and 50K on my home. My plan is to use half of the 401K to pay off the house, up the percentage rate to about 50% of my pay back to the 401K and retire when ever I decide I have had enough. of the Rat Race. There would be no 10% penalty because of my age, however the only thing that worries me is the taxes I’d have to pay the year I draw that much out of my 401. Quite a quandary…

    • That’s a tough call, Ray. I always cringe a little when people decide to pull money out of their 401k to pay off their house. The potential growth in your 401k is so much more than the negative effect of the debt you owe on your house. But, the emotional side has some weight to it too. If your life would be 10x better because you are mortgage free, then maybe it would be worth it to you. If you do decide to take this route though, perhaps you should withdraw the money in segments to stay in a low tax bracket. Or, wait until you retire and are earning practically nothing.

  26. husband and wife 66 retired with mortgage balance of 130000 and would sell home if needed for 270000.
    Our fixed retirement income is 84000 a year. No other bills
    Our 401 and cash balance is 400000.
    I like the ideas of having no payment on house . We have already downsized but really could downsize again. Thoughts

    • Hi PL! Thanks for stopping by. I always naturally cringe when people suggest taking money out of their 401k to pay off their debts, especially low interest debts like a house. If it was between downsizing and paying off your existing mortgage with your 401k funds, I would choose downsizing (and hopefully paying cash for that next house). Honestly though, since you are over 59.5 years old, you don’t have to worry about paying a penalty on the 401k withdrawal, which makes it a little less dumb. The only things you need to worry about are the taxes you’ll have to pay on the withdrawal and the amount of growth you are foregoing since the money is no longer invested.

  27. I have a question.. If your pulling money out of 401k to buy a house, will they penalize you? Currently I owe $100,000 on my mortgage. Between me an my wife, we have $300,000 in our 401ks. I own one property worth $80,000. It’s paid for. But I want to get into real estate so I want to pull $100,000 out of my 401k to pay off my house now and rent it out for $1400 a month. We are thinking of pulling 50,000 on a down payment on a new house as we have a bigger family now. I want to earn passive income in real estate and thought this would be the best of both worlds. I currently earn 750.00 on my one paid off property. Would my idea be ok? I was going to wait a year till my 401k reaches $300,000 and my wife reaches 100,000. Total $400,000. We are both in our mid forties. Any advice would be great. Just for reference, I do have $50,000 in stocks, $2,000 in bonds, my wife’s pension, $2,400 in iras.

    • Hi David – thanks for the question! There is a clause within the Traditional IRA that allows a first time home buyer to remove funds penalty free, but since you’re already on to your 3rd house (or more), you wouldn’t qualify for this. So, with taxes (35%) and penalties (10%), you’ll likely only be left with 55% of the funds that you pull out of your 401k. In order to get your $100,000, you’ll have to remove almost $200,000 to pay off your house, which doesn’t make a whole lot of sense for you right now. If I were you, I’d centralize my efforts on a single focus. Mark out a plan to pay off the house over the next 5 years or so, and then save rapidly for the down-payment for your next property. If you can’t stay in your current house that long, then just keep it simple and sell it to buy the next one.

      When you talk about withdrawing funds from your 401k, taking out another loan, and having rental properties, it just sounds messy and complex – and that’s when we all get ourselves into trouble. Take it one step at a time David. It sounds like you’re doing well so far. Just stay the course, keep the decisions simple and logical, and don’t touch that 401k! 😉

  28. I live in California. My house is valued at ~ $975,000 and I have two mortgages. The first is ~ $35,000 and the second, a home equity loan is $40,000. Both loans must be paid off March 2017. If I completely paid off my house, my monthly costs e.g. property taxes, utilities, etc would be under $1,000 per month.

    Having turned 66 years, I have applied for SS. My estimated annual income – without retirement funds will be about $36,000 a year e.g. SS, some self employment income and Airbnb.

    My question – can you advise me on how to decide whether to pay off the house using my retirement ($12,000 Roth and a a much larger amount Sep IRA) and how to do that so as to avoid lots of federal taxes. The bank said if I refinance I could include my monthly property tax if I wanted too.


    I am also open to combining refinancing and paying it off so that each year.

    • Hi Linda. Thanks for reaching out, and you pose a great question! I hesitate to tell you exactly what you should do since I don’t know what your exact situation is. For me, I’m always a proponent of paying off the mortgage with as much earned income as possible – mainly because paying down debt is more of an emotional decision that promotes more of a positive action. If you’re set on taking money out of your 401k, consult a tax professional to make sure you’re doing it as wisely as possible.

  29. this post may be a little old, but still very much relevant. Don’t forget about the state tax implications as well (Michigan would be an additional 4.25%). Also note there is an exception to the 10% penalty for those 55 or older with employment hardship.

    • Good point, Justin. Thanks for weighing in!

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