Simple IRA question

**lorraineb** · 04-02-2013, 04:47 PM

I think that this isn't the right time to be buying property -- rent and get through the divorce and once that is all settled and you can see where your finances are, you can begin thinking about purchasing a house or condo. If you don't have the money for a down payment, then you aren't ready to buy.

**Joe Lewis** · 04-02-2013, 05:01 PM

thanks for your response. My only concern with renting is that I'll be "throwing away" my money by renting and and not paying towards something I can own. I understand the situation with the penalties, but my debate is whether or not I'll break even with my losses on renting for 6 months or more or just take the penalty with withdrawing. The market for home purchase is good right now and I'm looking at it as a long term investment...my mind is not made up, that's why I'm asking.

**lorraineb** · 04-02-2013, 05:40 PM

Personally, I think that the "throwing away" concept is a false one. It is far less expensive to rent in most cases (most people compare rent to mortgage and fail to take into account all the other expenses that are associated with owning). Your best bet, again in my opinion, is to rent a small place (the smallest and least expensive you can survive with) for the next 6 months until your entire financial situation is much more clear. You are far more likely to come out ahead by doing this than taking money out of your retirement to buy a property at this point. Divorces can get nasty, and while I hope it won't in your case, they happen even to those that believe it will not happen to them. I still feel that if you have to dip into retirement to buy, then you really can't afford to buy.

**Joe Lewis** · 04-02-2013, 06:21 PM

Again, thank you for your reply. I failed to mention that I am currently working a city government job that has a very well self funded pension. I am not truly dipping into my retirement.

**Petunia 100** · 04-02-2013, 07:10 PM

Joe, I went through a divorce in 2006. I strongly urge you to make no big decisions (such as buying a house) or irreversible decisions (such as pulling money from your SIMPLE) at this time.

Get through the divorce. Let the dust settle. Give yourself some time to adjust to your new life. There really is no need to rush into anything.

Best of luck to you in the future.

**snafu** · 04-02-2013, 08:13 PM

Another voice to say this isn't the time to buy. The government said it will not raise interest rates this year. It's not smart to cash out retirement savings in the midst of divorce, or suffer penalties or add tax liabilities. As previously stated, endure the cheapest accommodation possible, save as much as you can for a downpayment and when you're in a good, clear headed space, identify what you need and the best community.

**Joe Lewis** · 04-03-2013, 10:14 AM

Thank you all for your input. I have decided not dip into my simple.

**lorraineb** · 04-03-2013, 10:19 AM

I think you have made to correct decision and you will be thankful for not doing it in the long run. Please keep us informed on how you proceed as it's always interesting to see the decisions people make. I think you will be in a much stronger position to make good financial choices once things with your divorce are clear and finalized. Best of luck

**Anton martin** · 04-04-2013, 01:24 AM

Wait For Some Time

Originally posted by Joe Lewis View Post

Hey folks, just got on here to ask a question about my IRA....I'm currently looking to possibly dipping into my simple for purposes of a downpayment for a home/condo. I have had the IRA for about 7-8 years and haven't contributed anything to it for at least 5 of those years...it's sitting at about $30,000+ and mostly due to the market. I know there are penalties and I know it's not the smartest thing to do....I'm kind of in a bind financially as I'm in the middle of a divorce. I looked for exceptions from penalties and if I qualified as a first time homeowner, I'd be okay, but I don't. Help, please!

I would suggest you to wait for some time to get everything on track, then you should look forward to buy property.

**Gailete** · 04-05-2013, 07:57 PM

Glad you made that choice since if you live in a community property state your spouse may be entitled to half of your IRA so you really wouldn't have $30K but $15K. Pensions and retirement plans are part of a divorce financial settlement. Take 6 month to a year to get settled into a way of life before you make a major decision on buying a home.

Simple IRA question