Equity buyout

jimmycrackcode · 2025-02-15T02:28:12+00:00

I would never give up my retirement accounts for a house. A house is just a structure. There are thousands in your area.

Investments in the stock market almost always outpace residential real estate in the long-term.

OctinoxateAndZinc · 2025-02-14T16:00:31+00:00

look to see if you can ASSUME your mortgage - that way you keep your rate
trading retirement for home equity is a last resort in my opinion. If its just about keeping the house because its 'your' you might want to sell/split. If there are logistical reasons, like you're primary parent and are staying there so the kids dont move schools, thats a better reason.
get the house appraised and hire YOUR own appraiser. They work for you. They will go lower. Assume she will get her own as well and you'll have to meet in the middle. Its worth spending $300-400 because when your guy comes in $20000 under you've saved $10000

Full disclosure: im doing what you're doing - retirement for house buy out.

Ways to do it:

Cash out - you will take a 10% early withdrawal hit and need 24-27% for taxes. SO if you take out $200,000, you're down $20000 in penalties, and another $48000 in taxes so you clear $132000
QDRO - qualified domestic relations order. You're TRASNFERING funds to her. No taxes/penalties in your side. If she wants 132k in cash you'll have to give her about $175000 (extra so she has funds for HER tax liability). She would NOT be subject to 10% penalty IF she withdraws it. Yes you're giving her more but its gone if you're cashing out. This would save you 25000 of money that would be gone anyway
QDRO of exact amount of buy out BUT if she has a good lawyer/people they would tell her not to do this because of the taxes.
HELOC or cash out re-fi - up side is you're not touching your retirement, down side is your mortgage payment will explode (new rate and more to pay).

TXJohn83 · 2025-02-14T15:46:32+00:00

Tax.... like for fuck sakes home prices are going to fall, let her buy you out or sell the house, now is a good time to rent.

47omek · 2025-02-14T14:11:41+00:00

Assuming you're getting something close to equal value it's a reasonable thing to do. Once the kids are out of the house you can sell it and downsize to fund retirement. At today's rates I certainly wouldn't want to finance any more than I absolutely had to. See if you can get her to agree to a pure dollar-for-dollar on the retirement accounts since home equity is post-tax money and some retirement accounts like 401k are pre-tax and she'll owe income taxes at time of withdrawal which she may not be aware of and you'd be coming out ahead on the deal.

bluephotoshop · 2025-02-14T11:00:14+00:00

Giving up your retirement funds is a very bad choice.

Exactly65536 · 2025-02-14T10:18:50+00:00

If you give her your retirement account, wouldn't your pension be gone? 20 years of work will build some, but it'll be less.

Title	Equity buyout
Author	Brief_Recognition509
Upvotes	3
Comments	12
Date	February 13, 2025 7:45 PM UTC (1 year ago)
Subreddit	Posted in /r/Divorce_Men
Original Link	https://old.reddit.com/r/Divorce_Men/comments/1ioroff/equity_buyout/
Archive Link	https://theredarchive.com/r/Divorce_Men/equity-buyout.1543823 https://theredarchive.com/post/1543823

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