Outside the Box: Retirement is decades away — can I buy a house now?

A client recently called one of our retirement plan service centers asking if he could borrow from his 401(k) to help with the down payment on a home. While his 401(k) plan does allow loans, we explained that taking one can derail long-term savings goals — and carries some tax and penalty risks if he changes jobs before repaying the loan — so it may not be worth it in the long run.

Of course, 401(k) loan inquiries aren’t unusual for us, but this interaction really put into focus how tough it can be for people to prioritize between two competing and important financial goals: buying a home and saving for retirement.

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