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Hi all -

I'm looking at buying a home in Feb/March of next year. I've got a question concerning my 401K and the distribution of money from there for a down payment.

Maybe someone here can run the numbers and tell me if what I'm thinking of doing would be a good idea.

I put in 6% of m annual salary and my company matches 100% of that 6%. I'm also currently 40% vested. I plan on taking an exempt distribution next year to use as a down payment on a home. Would it be to my advantage to continue putting the 6% in with the 6% match even if the market took a 25% drop between now and then? I don't expect year end numbers to look hot for the economy so I'm guessing the market would take dive just before I took my distribution.

These are the numbers I came up with.

Salary: 61K
bi-weekly contribution: 140.77
company match: 140.77
total contribution: 281.54
Vested value of cont.: (140.77*1)+(140.77*.4) = 197.08

The 6% contribution costs me roughly $100 off the bottom line of my paycheck so I'd see almost a 100% with that contribution (ceterus paribus). Is this making sense?

I could instead cancel contributions to my 401K, take that concrete, unchanging $100 and put it in a savings account where I know 100% of it would be there when the time came. I also lose the tax benefit of the 401K contribution which is sure to cost me at the end of the year.

Any ideas? I get the feeling that the 6% contribution would be Foolish, while cancelling it would be....foolish.

Thanks for -any- information you can provide that will shed light on this.

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