Is there any way to withdrawl out our 401k's to invest in realestate? What type of penalties would we have to pay? Is it worth it to do this or not cause we have been losing so much money that land would probably be a better investment. Thanks
For any help.

Now would be a good time to take your money out of any sort of market activity, and that includes the 401K stuff where it is invested in the market. Forget about any penalties. Which would you rather have - money in your hot little hand or no money as the stock market took a dive and you are wiped out completely? Real estate can be a better investment, but don't pay high prices for a home that will devalue when the housing market picks back up. Depending on where you live, of course, vacant land would be a better choice.

The answer is no - at least as long as you are employed by the company where your 401(k) is located. You are limited to the investment options within the plan. It is possible to invest in real estate inside an IRA, but it is very tricky and fraught with all sorts of rules that most would find onerous. First, you must find an IRA custodian who allows real estate investements. The property is actually purchased by the custodian (not you) on behalf of your IRA account, and ALL expenses must be paid out of your IRA account - repairs, taxes, utilities etc must be paid out of the IRA. And of course you are not allowed to have any personal benefit from the property, so unlike most investment property you can't use it yourself. Finally, while it's possible to invest in real estate through a Roth or traditional IRA, I'm not sure whether it's posible to do so through a roll-over IRA. So whether you can move your 401(k) from an old employer to an IRA to invest in real estate is doubtful. As for taking an early withdrawal and paying taxes and penalties to then invest in real estate - it seems to me that losing 40% or so of your retirement savings is not a good idea. Remember that you are invested in your 401(k) for the long term - think 40 years at least - and during that time your investements will go up and they'll go down. Don't let the current madness in the markets dissuade you from investing for the long term.

Here's an article that covers the basics of real estate in an IRA:
Online Exclusive: Buy Real Estate in Your IRA (http://www.realtor.org/archives/featuresept03ira)

Now would be a good time to take your money out of any sort of market activity, and that includes the 401K stuff where it is invested in the market. Forget about any penalties. Which would you rather have - money in your hot little hand or no money as the stock market took a dive and you are wiped out completely? Real estate can be a better investment, but don't pay high prices for a home that will devalue when the housing market picks back up. Depending on where you live, of course, vacant land would be a better choice.

I totally, completely and vehemently disagree with this and so do most of the financial advisors that have been quoted in the media.

Right now, any losses you have are on paper only. You still own the same amount of shares you previously did, but their value is just listed as considerably less. But, if you take money out now, you lock in those losses, plus, if you wthdraw money from the plan, you incur penalties and tax losses, thereby compunding the amount you are losing.

In one day the market gained back almost half what it lost in the last two weeks. So getting out now would be a huge mistake. Even doing an in plan transfer to less risky investments would be a mistake In my opinion. You need to decide what your risk tolerance is. As you get older and closer to retitrement, you do want to switch more risky equity investments into bond or fixed income investments.