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Is using money from my Roth IRA as a down payment for a house the same as swapping my investment for real estate investment?

I am 63 years old, currently married, and have about $150,000 in my Roth IRA. I want to buy my own house, so I propose using at most $100,000 from my Roth IRA for a down payment. Wouldn't that be like swapping stock investment for real estate investment?

Estate Planning, Investing, IRAs, Real Estate, Stocks
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3 weeks ago

Hello,

Depends on how you look at it.  Buying a home is kind like an investment.  You dutifully put money each month to build up an equity and hope to sell it someday to reap the benefit of a high price and the equity for retirement or other purposes.  However, most people don’t treat home as an investment; otherwise, they would be disappointed to learn there’s no cash flow derived from such an activity.

If owning a home gives you the pleasure and pride of owning a piece of real estate and do whatever you please (decorating, gardening, etc.) without any restrictions, then it may be worth the effort to swap a portion of Roth for home.  On the other hand, if you simply just want to expand your traditional method of investment, I’m hesitating to recommend replacing a majority of stocks/bonds for a real estate.   You definitely need to discuss further with your advisor.  Best!

April 2019
April 2019
3 weeks ago