Ways to pay for adoption? Anyone withdraw 401k?

MauidAims · June 2012

Im trying to think of some ways to pay for adoption because it is pretty expensive plus I want to be prepared for any unexpected expenses. Right now, I am being told expect $25k total (infant domestic). We would take what we have towards IVF and use for adoption. I also have some old 401ks that I could withdraw but of course get the 35% (basically) penalty. Ive seen some grants available. Ive also contacted our local foster-adopt agency and OMG it was the worst conversation. The lady had no clue what she was talking about or how things worked. So disappointing. Ive read somewhere that maybe we should try contacting other local county agencies as well, as we are not set on infant adoption (prefer up to age 2) I was just curious how others pay for adoption and if there is something I may be overlooking? TIA!

erinmc1 · June 2012

We mortgaged our house. Neither of our companies offered any adoption assistance benefits, but we owned our home free and clear, so we just opened a home equity line of credit, and have been making the agency payments out of that.

caliblondieus · June 2012

There's a lot of companies that do adoption loans. I don't know what the interest rate is these days but considering interest rates are good, this could be an option.

kgs0505 · June 2012

I wouldn't withdraw your 401k. Instead if you have a few scattered about you should roll them I to your current one, then take a loan out if you want to use it. That's what I did. You can usually borrow up to 50% of the value if the account. Then you pay it back thrust payroll deductions. The interest is paid to yourself.

IRR · June 2012

kgs0505:
I wouldn't withdraw your 401k. Instead if you have a few scattered about you should roll them I to your current one, then take a loan out if you want to use it. That's what I did. You can usually borrow up to 50% of the value if the account. Then you pay it back thrust payroll deductions. The interest is paid to yourself.

Good advice and I agree don't withdraw from your 401K. A loan from it yes, but to withdraw with penalties is only hurting you and your family in the long run. PP mentioned home equity loan if that is possible also a better option. GL

MauidAims · June 2012

IRR:

kgs0505:
I wouldn't withdraw your 401k. Instead if you have a few scattered about you should roll them I to your current one, then take a loan out if you want to use it. That's what I did. You can usually borrow up to 50% of the value if the account. Then you pay it back thrust payroll deductions. The interest is paid to yourself.

Good advice and I agree don't withdraw from your 401K. A loan from it yes, but to withdraw with penalties is only hurting you and your family in the long run. PP mentioned home equity loan if that is possible also a better option. GL

thanks for the idea! I was just of the frame of mind to have the money free and clear vs having another debt. lol Silly, I know. These are my old work 401ks so I wonder how they deduct them if I take a loan against them. We did check on DHs 457 (same as 401k) and it was crazy insane how they wanted to make sure it was an emergency and that we would have to show proof that we couldnt get a loan somewhere else or use credit cards (which we could). I was shocked.

kgs0505 · June 2012

You can roll your old work 401k's into your current one with your current employer. Then you'll have one big 401k. Makes the whole thing less complicated. You should talk to your current benefits dept about it and see what you need to do. It's usually pretty simple.

MauidAims · June 2012

kgs0505:
You can roll your old work 401k's into your current one with your current employer. Then you'll have one big 401k. Makes the whole thing less complicated. You should talk to your current benefits dept about it and see what you need to do. It's usually pretty simple.

I am a stay at home mom so I dont have a current employer. These old 401ks are from my previous days as a career woman. I wonder if I can still roll them into an IRA and withdraw?

I see you are from CA too. We are as well. May I ask what agency you adopted through? Im researching all of these different ones and my eyes are crossed.

kgs0505 · June 2012

Ah, you should be able to roll them into one. You'll have to call each holder and find out the process. As far as agency, we went thru a law firm called AdoptHelp. For our home study we went thru Independent Adoption Center. They also do adoptio ns as a traditional agency. I enjoyed working with both. AdoptHelp was pricey, but I do have my sweet boy to show for it

lilmufish · June 2012

Im trying to think of some ways to pay for adoption because it is pretty expensive plus I want to be prepared for any unexpected expenses. Right now, I am being told expect $25k total (infant domestic).

That is on the average end of what I'm seeing. I know it can be upwards of 35-40, if you include in birth mom expenses or traveling to another state (hotel, last minute flights, etc). I've also seen where the kiddo had an unexpected health issue and adoptive parents had to front money to pay for supplies to make it home. If you are wanting to be prepared for unexpected expenses I'd raise that cost a little.

We would take what we have towards IVF and use for adoption. I also have some old 401ks that I could withdraw but of course get the 35% (basically) penalty.

I would not draw from your 401k. Not only is the penalty not worth it, but remember - your 401k is there for your retirement, not as a glorified savings plan. You COULD take a loan, but I wouldn't touch it, if you have other options.

Ive seen some grants available.

That's neat!

Ive also contacted our local foster-adopt agency and OMG it was the worst conversation. The lady had no clue what she was talking about or how things worked. So disappointing.

Foster and adoptive agencies are mainly there for adopting children from the foster care system. It's a whole different mentality an infant adoptions. And the expenses, are much different. I'm not sure which one you are leaning towards...

Also, most of the time, the person you get when you call in, is a receptionist or someone covering the phones. If you are wanting to foster to adopt, I might recommend setting up the social worker appointment and asking the social worker in person. That might help get some questions clarified.

Ive read somewhere that maybe we should try contacting other local county agencies as well, as we are not set on infant adoption (prefer up to age 2)

I'm not sure if your state is like ours, but 2 years ago, they passed a law that stated that kinship placements were PREFERRED over foster placements. With that said the number of infant to 6/7 year old adoptions from a non-kinship family went down SIGNIFICANTLY. So, the reality is that the counties are not doing foster to adopt with young children. Typically they are placed with bio parents, kinship families and lastly the foster family...which again is becoming more and more rare.

I was just curious how others pay for adoption and if there is something I may be overlooking? TIA!

Paying for adoption that i've seen...
Saving,second mortgage, trivia nights, etsy fundraiser, second jobs, church fundraisers...

Good luck!

Ways to pay for adoption? Anyone withdraw 401k?

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