How to Cash Out 401K Early (without penalty)

You may or may not be satisfied with your 401K. Either way… there’s been a moment where you would’ve like to have cashed it out for a better opportunity, but your financial planner can’t help but remind you of the penalties, and then another opportunity slips away.

If you could only cash out your 401K early, without penalty?

How much better off could you be?

I’ve got 3 ideas for you to consider that just might change your world!

My name is Matt Theriault. When aspiring, frustrated investors are stuck in the proverbial “rat race,” they come to me.

I help these people create passive income through creative real estate investing strategies so their money works harder for them than they do for it, resulting in ultimate financial independence and freedom.

Whenever you're ready, here are some ways I can help...

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[BonnieSetliff]

I am from Spain, my friend in Texas referred me to this channel you make a lot of sense but I do not understand anything until she referred me to a financial counselor in USA that help me to craft my portfolio and over a year we have been working together making consistent profit enough to get me a new apartment and care for parents.

[tarrafal]

I am 34 already own couple multi family property and i am withdrawing my 401K to invest in more properties. He is 100%
You need the cash flow now
401K is if you want to play safe
Not worth it for me.

[JimmyHFinancial]

Yea, i already cashed out my 401K and put it in real estate..overall better results long term

[thangvo]

I had the same thinking and similar analysis done myself; finally got a validator from an expert in the industry that this is not an insane approach. Opportunity cost of leaving money in the 401K is much higher than people realize. Thanks for the video!

[nala]

Most Americans don’t realize when you take out a 401K loan, that money gets taxed, then you pay that money back post tax, the when you retire, it gets taxed again. Nice little system you got going there Uncle Sam

[Eghtykeys]

I see some folks speaking on the self directed IRA. My current understanding of buying real estate in a self directed IRA is that you miss out on the monthly cash flow. Anything above principal has to go back into the IRA. So I love this idea of working the (penalty) numbers of my entire investment portfolio to grab cash flow NOW instead of twenty years down the road.

[HazyJay]

Thank you for the calculation. I will never have an employer match for 401K (based on my current field), I'm trying to retire early so money when I'm 60 is relatively useless, I'm thinking just avoid the 401k or any retirement accounts altogether.

[RedShiftedDollar]

You should have covered the taxes you still have to pay after age 59 1/2. People use taxes as a reason not to withdraw, but you never avoid the taxes.

[roadrash]

I'm 38 and thinking about cashing out 100k and then starting over for retirement. Be debt free an Wanna buy property with rest.
Only 8 years left on my house. I feel like I'm wasting time then the taxes 🤯

[khoward]

Rollover 401k to self directed IRA. With a self directed IRA you could buy 4 houses using the math in the video and have twice as much money when you retire. With a self directed IRA you can invest in real estate or gold, silver, even bitcoin if you want. If you expect to be in a higher tax bracket when you retire rollover the 401k into a self directed Roth IRA and pay no tax at all when you retire. One thing to consider with a self directed ira is the money the income property makes has to go back into the ira account ( it can be used to buy more houses or invested in almost anyway you see fit used to pay taxes and upkeep on the income property) until you retire and take distributions. It is a lot to consider but could be a happy medium between keeping all that $100, 000 in a 401k and cashing out and paying the tax and penalty.

[GimmeTheScoop]

This is exactly the calculation I was looking for. I knew that I’d benefit more in the long run but I didn’t have the math to back it up and really make the jump. Now with no penalty this year, I am definitely making the move this year. Thank you so much for the awesome videos.

[brianbuxton]

You really only need to worry about recouping the $10K penalty, which you'll do in less than 2 years in your RE example. I say this because you still need to pay those state and federal taxes after 59-1/2 years old...and they would be on the $432K, not the $100K...and taxes will likely never be lower than they are now. So, yeah, I agree...and may may not even have to pay the 10% and can spread the taxes out over 3 years during the time of COVID-19

[NikNik]

Gotta pay Uncle Sam anyway. And 10% is a small price to pay to gain freedom from my toxic workplace. I’m doing it…under 55-59.5.

[Spiff]

55 rule also applies to those who are at that age border..no 10% penalty if your employer offers that benifit!

[kingtaco]

Just cash out and go all in On the Dodgers
🚀🚀🚀

[keywestalert]

This concept seems like a good idea, but for me to get $100k dollars in my 401k will take 15 years or longer and at that point I will be so old! I might not want to take that risk

[porsche]

Epic Real Estate Investing (or others): What about rolling your 401k into an IRA, and then investing that in real estate. My understanding is that you are allowed to invest in real estate IN an IRA as long as it is an investment property, not your own residence.
Also, I assume you are talking about a 401k from a job you already left right? You can’t take money out of the 401k at your current job.

[rsimpkinsg]

It makes no sense having all your money locked up until 59. I plan on being one tax bracket lower when I retire so I’d only be losing the 10-12% now. I’m going to take out enough to finish paying off my current house. I can then modify my HELOC for the full 90% LTV. Saving with no mortgage and investing the HELOC in the stock market. I’ll should be able to put down at least half on my next home in just a few years.

I’ll have have a super low mortgage, 2 HELOCs invested and getting rental income from my first place.

Cashing some of that 401k out can definitely improve your cash flow today and give you more time in the game.

[arturokst]

Bealive it or not all this numbers match with my actual balance in my 42 years old and I Bealive I will consider this option very seriously....thank you very much for the information sr...

[wonkavisionk]

great video! the math finally makes sense to back up what i was thinking about opportunity cost! Very impressive break down.