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Was DH out of line…Feeling very uncomfortable am I overreacting

Disneylover2000's picture

PLEASE READ ALL...DH and I have been talking about moving down south for about 3 years. Well the time is finally right and we will be moving in a year or so. 
 

So here is what made me SUPER Uncomfortable. I was talking to DH on my lunch break as I always do. I Casually mentioned how I just found out I have 400,000 in my retirement plan at work. DH Immediately said " good we can use that to buy the house down south". I was totally taken back as we NEVER talked about buying a house before selling ours OR using my retirement money to put money down on the new house. I told DH I really don't want to borrow from my retirement plan.  DH said all his money is tired up in our house so it should be me since I have money in my retirement plan. I then said why can't we sell our house first and use that money to buy a new house. DH said then he would have to pay to shore his stuff and he does not want to do that. I asked DH if he could borrow from his retirement and he said I make more money than him AND he put the down payment on the house we are living in now so it should be me. I could tell by DH tone he was Irritated/pissed I was giving him a hard time and not agreeing right off the bat. 
 

Was DH out of line? Honest answers please 
 

If it was just DH and I maybe I would not feel this way BUT SS is moving with us. SS is spoiled ROTTEN and I can see DH wanting to take a Mortgage out to pay for some Ivy League college for SS. 

notsurehowtodeal's picture

Do not do it. People sell their houses and use the money to buy new ones all the time. You can time things so nothing needs to be put in storage. If he won't listen to you, contact a financial advisor to back you up.

notarelative's picture

TAXES! TAXES! Unless your money is in a Roth, taxes would take a huge chuck. Financially, most likely, not a wise decision. Even if you ended up needing storage, the cost would not come close to what you'd pay in taxes.

Personally, if I had the cash, I'd write him a check for half of the down payment for the current house. Of course, that's assuming your name is on the title. If it's not, I'd tell him to pound sand.

 

Merry's picture

I'm echoing everybody else. Do NOT do this. Those funds are for, uhm, retirement. What will you live on if your money is sunk in real estate? And what happens to the proceeds from the sale of the current house? Do you get that to replace your retirement funds? My guess is no.

He doesn't want to pay to store stuff. That's just pathetic.

Sell one house. Buy the next house. People do it all the time.

 

JRI's picture

Ask your self these questions: 

1)  Would I ever get that money back?  Don't count on money you'd get from the sale of that hypothetical house because you would still need someplace to live.  

2)  Would I repay debt?  The answer is yes.

Ideally, sell your house and use that money for the new one.  Worst case, borrow what you need to make it happen.  You would repay that loan but you'd never put back your savings.

SteppedOut's picture

Do NOT agree to this. I would be feeling 10 different kinds of pissed off if I was you. This would be sending up big red flags for me. 

ESMOD's picture

Keep your retirement where it is.  If he feels you haven't been paying your fair share of other expenses.. that is another discussion, but asking you to freeball your retirement so he can be comfy and not sell the other house first? no.

Depending on your market, you might buy before you sell the other one... if you could qualify for a new mortgage while still having the old one.. but honestly.. sell the first one first.. 

I know he is probably all.. well.. if you loved me.. we will be together you will not ever want for anything.. but things happen.. you could end up royally screwed and that is a huge ask.

Survivingstephell's picture

The market in general is a sellers market. Spring is coming.  You should be able to sell quickly.  DH just wants to free up his money for SS. Will SS take care of his broke a$$ in retirement?   Save that money for your retirement.  

TheAccidentalSM's picture

Under no circumstances should you touch that retirement money (unless you are about to starve to death).

Sell your current home and then buy a new one.  

Your DH is being a not dear anything and is trying to manipulate you.  

 

SeeYouNever's picture

DH is out of line and his plan is stupid frankly. If you want to move it should be contingent sale based on selling the house that you're in. I don't want to borrow against your retirement ever and especially later part of your career where you would have to pay it back. That would be tying yourself to working for however many years it takes to pay it off so you can't retire. 

I'm curious what exactly he means that he would have to " "pay to shore up his stuff" I think whatever the answer is here would give us a lot more insight into why he is trying to make you borrow against your retirement.

Missingme's picture

Hell to the no no no would I use my retirement money in this situation. Do not fall for that. Sell your house and sell whatever else you have to add to the price of the new house, but do-not take from your retirement! You've worked long and hard for that assurance. Just say it's not a possibility. 

Peach's picture

As many others have said that is not a smart plan.  Everything else aside, here is the obvious.  When you sell the house you currently own, you can invest those funds back into the new house.  You will not pay a tax penalty for doing this.  If you take a direct distribution from your retirement plan, you will lose 10% right off the top as a penalty for taking the money early.  Then you will also pay taxes on that money.  Depending on your personal tax liability, you stand to lose more than $150k to taxes.  Don't do that to yourself.  

Rags's picture

End of story.

Or maybe not the end.   Housing assets are housing assets. I agree that you sell then buy is the way to go.  Retirement savings are for ..... retirement.  As you are doing, I would defend your retirement assets so you are not house rich and cash poor at retirement.

My #2 asked me yesterday how my DW (the CPA) and I deal with bills, accounts, etc.....   He is approaching his second marriage, his GF is approaching her first.  He, and the bank, own the home, they are not planning on blended finances as he is still about 5 years from retiring his CS obligation on his two boys.  My DW and I have blended finances from the very beginning. Though at that time we had nothing but two apartments full of college furniture and two 8yo cars.  The only asset separation we have is our IRA/401K investments which we are each the sole beneficiary of in the event of the demise of the other.   

He and his GF are both high earners.  I advised that they maintain separation of finances and open a joint account that they both contribute to for household bills.

We did once take a $40K loan from my401K which at that time was the limit I could borrow from myself without penalty. We repaid that loan within a few years at ~4%-ish interest if I recall correctly.  For sure, do not cash out your 401K/IRA to buy a house. Not when you already have one.

Bad move.

Good luck.

Sandybeaches's picture

This would be a bad idea,  you only borrow in an emergency situation with no other options and even then it's still not a great idea. 

I wonder what was his plan for purchasing the other house before you mentioned how much you had in retirement? Why would his things and not yours need to go in storage? And what is his plan for retirement money if you spend it now on a house?

People sell homes with constingcies every day. Contingent on the both sales would be your situation..

Gonnalosemymind17's picture

Oh my, please don't do that to your future self! You will regret it. Sell your house amd use that to purchase the new one. Seems like he has his own reasons for suggesting you use your retirement money. No

Rags's picture

the money from the IRA/401K invested in a jointly owned home an  asset aquired during the marriage. A lawyer is the right person to ask for clarification.  This just set off my smell test stench sensors. I would not do it. Not in a fresh marriage anyway.

la_dulce_vida's picture

I should have responded to this - how did I miss it.

You should NOT ever, take money out of your retirement to buy a house UNLESS it's in your name only and your spouse signs a quit claim deed. Why, you ask?

Right now, any retirement money you have earned before your marriage is YOURS. If you take it out and co-mingle it into a house that is also in your spouse's name, it automatically becomes HALF his unless you sign some kind of legal document.

Should you divorce (God forbid) - you're screwed. That 1/2 of the house belongs to him as well as 1/2 of any retirement savings you earned while married (dependent on the laws of your state and if there is a prenuptial/postnuptial).

Someday you're going to need that money for retirement. Chances are you will outlive him, and if he's not so good with money, you likely won't end up with a lot from him to fund your retirement. You have to take care of yourself - don't sacrifice your personal retirement savings.

Suggestion to DH: Get rid of a lot of your stuff so you don't have to store it or move it. Have you priced moving services these days - outrageous. Right now it's better to rent in the new place until the housing market settles down, and to allow you time to find the right community.