A 401(k) plan should not be used as a down payment fund.

When buying a home, some people may not have enough saved to make a nice down payment, but using your 401(k) plan could make matters worse.

Craig Donofrio of Realtor writes that if a buyer loses their job after investing into a home, there may be more financial troubles. It's likely that the buyer will owe money back, and will not be able to leave their job for a long time. Also, they will lose their flexibility and will receive a 10% penalty on their taxable income.

Not really. When it comes to plundering that 401(k), you open yourself up to “plenty of risks you don’t need to take with your retirement money,” says Joseph Ritter, a certified financial planner and founder of Zacchaeus Financial Counseling in Hobe Sound, FL.

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