Nearly one-third of aspiring homebuyers plan to pull money from their 401 plan to help cover the cost, according to the Real Financial Progress Index by BMO Financial Group.
"You really, really, really, really shouldn't be taking out your retirement for a house," said Stacy Francis, a certified financial planner and president and CEO of Francis Financial in New York City.Is it time to rethink the 4% retirement withdrawal rule? For example, a 30-year-old worker who left $10,000 in their 401 instead of withdrawing it could end up with nearly $77,000 more for retirement at age 65, assuming average annual returns of 6%.against your 401 is generally a bad idea, it can be a more palatable option for the down payment or part of closing costs of a home, versus a withdrawal."The key thing is to ensure that you pay that back over that period of time," Parrish said.