Buying a home can be financially challenging, and some individuals contemplate using their 401(k) savings as a solution. This article discusses the feasibility of withdrawing or borrowing from a 401(k) to cover a down payment, clarifying that while withdrawals come with penalties and taxes, loans provide an option without immediate taxes. However, accessing retirement savings can harm future financial security, so it's crucial to weigh the risks and consider alternative savings methods before deciding to use 401(k) funds for a home purchase.
You can use your 401(k) to buy a home with a 401(k) loan or withdrawal.
Using a 401(k) to buy a home can work in certain situations, but it comes with risks.
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