[cgbg]

When I was a lot younger I borrowed from my 401k to buy a house—just sick of renting.

Needless to say that turned out to be a ridiculously wise decision.

[SecondAmendment]

>Needless to say that turned out to be a ridiculously wise decision.

Me took, the rate of return on buying a home almost certainly outperforms any of the options you have on your 401K, and you can usually deduct the mortgage interest.

[wally_bert]

I had to raid 401K to pay off a ton of hospital bills that insurance didn’t cover from a few stays.

Lung clots and organ failure.

[Political Junkie Too]

In my case, after college instead of investing the maximum amount in my 401(k), I did what many people say not to do and only invested the minimum amount that qualified me for the company match. The rest of the money (that I could afford to save, but much less than the maximum that could by law have gone into a 401(k)) went into a savings account for a 20% down payment on a home (to avoid PMI).

It took me 14 years before I had enough for a down payment to buy a condo in California. I stayed in that home for 19 years. When I sold it, I got 2.6 times my purchase price, making that saved down payment earn a pretty decent return.

When I sold my condo, I moved to Texas and bought a house that was more than twice the size of my condo. That house has now appreciated by 50%, making the initial savings return even more!

I might have had to borrow from my 401(k), but I chose to go the savings route and wait a little bit longer to purchase my first home.

-PJ