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What's the better use of a 401k for this retiree?

My husband worked for the same company for 34 years (from age 21 to 55).  He retired five years ago at age 55, with his 401k valued at $90K.  He's now age 60, drawing his company pension, working parttime, and is considering withdrawing his 401k funds which are now valued at $55K.  Does it make sense to do this, pay the income taxes, and invest the remaining money in residential real estate that will generate a monthly rental income?


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Open the pod bay doors HAL

Withdrawing the money with the market down is going to be painful but with real estate values also down, I would invest the money in property, especially if it will generate immediate income. 55K may turn into 45K but real estate will always have value and if you have sufficient income to sustain you in retirement, and don't forsee a need to have the cash, I would buy real estate. 
Posted 2009-09-04T21:17:03Z
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I would talk to a tax advisor first to see how much he would have to pay in taxes. If you put all you money in the real estate, then what will happen if you need a chunk of cash? As you get older, you still have to maintain that real estate(repairs, etc) unless you have children that can do it for you, you would have to pay for those services. What are rents going for in your area? Talk to some landlords...there are some landlords associations that can give you some pointers too, or you could join to help insure quality renters. A good tax advisor could also give you some tips on whether this would be good for you or not in your particular situation...best case and worst case scenario sort of thing.
Posted 2009-09-05T20:11:46Z
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