Cabin Chick Blog

At the cabin, the kids and I are working on a lot, learning a lot, and making a lot of mistakes, but most of all, we're having a blast and making experiences as a family! Read some of what we are up to and what's new along our journey. Welcome to the Cabin Chick Blog!

Alan asks... "Should I cash out my 401k?"

Alan asked a great question... "Should I cash out my 401k to buy land and steer my tiny house?" Well Alan, here's what I'd like to suggest:

So you're thinking of cashing out your 401k to go tiny? I love your enthusiasm of this, but also play it smart. If this is your sole savings you don't want to liquidate your emergency and future planning funds etc. Building a tiny house is like buying a small car AND more than likely will not appreciate too much if at all. So liquidating an investment fund I wouldn't necessarily recommend, but instead work on saving $15-20k. Sure, it may take some time, but you'll then have a tiny house and still a 401k! Don't let any impatience make your life harder down the line.

Now if you're needing money for land, try what I did and get into a low interest 10 year loan and save up for the down deposit. Land generally appreciates, so this is a good investment.

401k funds are powerful funds because you can take them out tax free when the fund matures and when you retire. So unless you have other savings means, I'd not liquidate your 401k, but instead take 2 years to save up to pay for your land and tiny house in cash as much as possible. If you still need more money, then look into a low interest, short term loan to pay for the land and then use your saved cash to build your tiny house.

That's my suggestion. All my best and thanks for asking your great questions!

by Cabin Chick