Right now, the CARES Act is allowing Americans expanded options for tapping into retirement funds. Given these options, should you tap into a 401k to pay off high interest credit card debt? On this Q&A Monday, I’m answering this question, and more!
On this episode of Investing in Real Estate, I’m answering three listener questions on topics like accessing retirement funds, making connections in real estate, and options for using equity to expand a real estate portfolio.
On this episode you’ll learn:
- Why you might consider using your 401k to pay off debt.
- How to connect with like-minded investors in your area.
- Why a cash-out refinance is a great option for growing your portfolio.
Why You Might Consider Using Your 401k to Pay Off Debt
During the pandemic, the federal government has allowed individuals increased access to retirement funds. Previously, most contribution plans allowed the account holder access to $50,000 or half of their vested balance. But under the CARES Act, you can now borrow up to $100,000. The government has also lessened the tax burden on these loans and withdrawals. If you’re paying 18-22% in credit card interest, tapping into your 401k is a great way to get out of high interest debt. Remember, it’s your money sitting in that account, and a 401k isn’t that great of an investment vehicle anyway.
How to Connect with Like-Minded Investors in Your Area
The best way to establish relationships with investors in your area is to attend your local real estate meetup. You can find these at meetup.com. When you show up, don’t be a fly on the wall! Collect and give out business cards, have conversations, and build relationships.
Why a Cash-Out Refinance Is a Great Option for Growing Your Portfolio
If you have equity in your primary residence or rental property, you should consider utilizing that equity to build out your portfolio. Right now, home equity lines of credit have incredibly low interest rates. That equity is yours, and it’s just sitting there. You can’t eat equity, go out and use it to your advantage!
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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