please help! 401k rollover question

[wonderwall824]

Hello everyone, newbie here.

I'm looking to chronicle your financial wisdom.....

My car has 232,000 miles on it. At some point I am going to need a new car. I do not want to finance one. So far I have $5000 for a car. I'd like to buy a used car straight up. I have a 401 from another job....it's just been sitting there....Ive been meaning to roll it over but it hasnt happened. I have just started a new 401k with my new company.

Would it be a no no to cash out, take some money to help me buy a car and put the rest into an IRA or some other account? There's not a whole lot of money there. I am 32, I started the 401 when I was about 23.

Should I roll it over completely into my new unmatched 401k? ( i know this is prob best long term)

Reason Im pushing is my son has special needs, his medical food is really really expensive. He doesnt qualify for SS because of the money I have saved for my car.......

I really appreciate all of your thoughts! Thank you!

[autoxer]

You are better off financing a used car, then withdrawing from a 401k to pay for it.

[Leo]

If I were in your shoes, I would buy a good used car cash or financed a used car not more than 3 years and not more than 10% of your take home. I think you can buy one not more than 5 years old and with less than 60k miles in 10k range. Then I would just Rollover my 401k. I would never touch my 401k/IRA.

[TBH]

Yes, agreed, do not touch your 401k for this purpose. Roll over your 401k now, either into your current 401k (if you like the investment options) or into a rollover IRA. Keep saving til you NEED to buy another car.

Best of luck caring for your son. Don't forget, being prepared for the future is good for him too.

[scfr]

1. The Rollover: You don't have to rollover to your current employer's 401K. You can move to a rollover IRA which gives you more choices. When I left my last corporate job, I rolled my 401K funds in to a Rollover IRA at Vanguard where I had the opportunity to choose from many excellent, low-cost investment options. (I wish I could rollover my 401K at my current employer, but alas I can't.) I do NOT recommend using your 401K money for a car purchase

2. Car / SS Benefits for Son: If you were to take the car savings plus trade-in value (or sale proceeds) of your current car and get a newer car, are there used car options you would be satisfied with? And would that mean you could get SS benefits for your son? If the answer to both of these questions is "yes," then you may want to think about going ahead and getting the newer car now. I usually advocate delaying purchases and saving for a longer period of time, but your situation with your son is special.