I think I have made a decision about my pension payout. It is over $40k in 2 buckets of $33k and $9k. I think I am going to roll $10k into an IRA and take payout on the rest. Yes I know I will pay taxes and penalties. But with that I should have $20k left over to fix up the current house to sell. I need this. The way we are living right now is pretty much a hardship. It's not like I just want to move. My physical and mental health are suffering from the commute. I don't have time to cook, I don't have time to exercise enough, I feel rushed ALL the time. Somehow I need to change this, and I feel like the timing on this is not coincidental. I have a lot socked away for retirement and can save more. I am scared by the amount of work that moving will require but that'S just how it will be for now. We'll get through it and things will get better.
Also, I called the old company to find out what they needed to know with every intention of putting the money in retirement, and the whole time my heart just sank and sank. I realized this is not really what I want or need. I need to move.
What do you need to do to the current house to sell it? Would it net you at least what you're losing out in the $33K in retirement?
I understand wanting to sell your house, but also that putting a lot into a house might not have much in return value.
IDK exactly. The master bath has some mold on the drywall in the shower above the surround thing that definitely needs redoing and probably the whole bathroom; I suspect they didn't use the right drywall. We have a crack in one vinyl siding piece, need to swap for one behind the shed or in back and replace so the color fading doesn't show. One of the dogs scratched up some cabinets in the kitchen kind of bad. Grass isn't in good shape: crabgrass in front and sparse in back (dog). Some tree work is needed. 1-2 windows, and the back sliding glass door is cracked. Repaint a couple of rooms and the upstairs hallway.
We think our house in good shape will bring $210k to $220k. We owe $150k. Would shop in the $250-300k market. We would use pension payout to fix up house and equity after paying realtors to put down on new house.
In the grand scheme of things, it's kind of like "free" money anyways, right? Ie: money that you had no idea was coming your way, you weren't planning on it, etc?
Either way, I would talk to a realtor sooner rather than later and see what are things that you actually need to fix in order to sell. And/or a contractor to get a good feel for how much those fixes would cost.
In the grand scheme of things, it's kind of like "free" money anyways, right? Ie: money that you had no idea was coming your way, you weren't planning on it, etc?
Either way, I would talk to a realtor sooner rather than later and see what are things that you actually need to fix in order to sell. And/or a contractor to get a good feel for how much those fixes would cost.
I mean, I think it's obvious that you know that in a perfect world, you'd roll it over. But since none of us are living in the perfect world, it's not a HUGE amount of money, AND it can go towards potentially easing things on you.. It makes sense.
Roll the money into an IRA Take a loan for the amount I would have wanted from the payout from my 401k Reduce my contributions to 401k by the amount needed to pay back the loan (if needed) Move
This would avoid the tax implications and penalty, and the money would continue to earn interest in a way since I am replacing what I take out with an even higher dollar amount I put in.
I don't plan to leave my job. If I did, worst case is I cash out the IRA and pay off the 401k loan. Basically reversing the above.
Post by erinshelley21 on Feb 14, 2017 16:32:20 GMT -5
I spent about that much on settling with the jerk that used to work for me last year. Mainly because my attorney wasn't sure we would win, but also because of for my mental health.
Like k3am said, it's money you weren't expecting and if it's going to make your life easier and most likely happier, go for it.
Definitely talk to a realtor about what needs fixed. Mold is obvious but scratches on cabinets may not be worth it.
FWIW we didn't fix: anything cosmetic, windows with broken seals, window with chipped glass, leaking shower pan with incorrect drywall behind tile, carpet or the fence that was original to the 80s. We sold for over asking.
So before taking the hit, be sure to discuss with a realtor. Inventory was nonexistent at our price point.
I think I your new approach seems like a good one. You're not paying a tax penalty then and are benefiting from the whole amount.
Also, Id see what a realtor says about some of your projects. Mold definitely needs to be fixed but I'd see about projects like the trees if it will really hurt your resale.
akafred, when we sold our first house, we had a former home inspector do a walk-through and tell us what a home inspection would find. Our realtor recommended it. Then we sat with our realtor and said what we should go ahead and fix, what we should leave for the next owners, and if any we were leaving unfixed would be likely to scare buyers away.
Post by mustardseed2007 on Feb 15, 2017 6:03:09 GMT -5
Realtor, contractor. Go.
I don't take loans on 401Ks for the same reason I don't entertain the idea of two mortgages but other people in the world do this kind of thing all the time and it works out just fine.
Sometimes you need to make changes for yourself, so do it!! Hooray!
And everything everyone else said about speaking with a realtor. How much you need to do will depend on your area/market.
akafred, when we sold our first house, we had a former home inspector do a walk-through and tell us what a home inspection would find. Our realtor recommended it. Then we sat with our realtor and said what we should go ahead and fix, what we should leave for the next owners, and if any we were leaving unfixed would be likely to scare buyers away.
One of my coworkers HIGHLY recommended a contractor/handyman who also used to be a home inspector so that is the other missing piece. She said he was dirt cheap and super sweet. Hopefully he comes to my neighborhood.
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