have $200k cash, and $250k in 401k, loan balance $400k. currently renting the home positive income around $300. I am in mid 30. Interest 4% 401k is managed last year performance with the recent market issue -8%, worry that there will be big dump soon. what do you think?
What? You're thinking about withdrawing from a 401(k) to pay down a mortgage? Why? Didn't you go for fixed rate? Could've locked in a ridiculously low rate.
Your 401k is outperforming your loan interest. Why even consider doing that?
No fool.
What a stupid idea.
The consequences for withdrawing your 401k early should prevent you from doing something so dumb.
You can usually only borrow half of the 401k anyway. Don't do it.
It’s a withdrawal, not a loan.
Why are people so stupid?
What is the interest on 401k loan? If it is the same as your mortgage rate, then converting half of 401k to cash and borrowing against it makes more sense than taking out that amount from bank. After all your 401k loan payoff interest goes back to your account and not to bank
Withdrawal from 401(k) and you take a ~50% tax hit. You don’t have as much money as you think. Bad idea overall though.
What's the interest on the loan?
4% updated the post.
Absolutely not. I would not pay off the mortgage even if I had full cash on hand