Should I take money from my 401K to pay off my debts? I do not mind the fees.?

I do not make enough money to pay off all my debts in one -two years. In total, my credit card debt is $4,400. I rent, and have no savings except for my 401K.

Would it be smart to borrow from my 401K?

Should I take money from my 401K to pay off my debts? I do not mind the fees.?

No. Since you are thinking of touching your 401K, a better approach would be temporarily stop contributing to your 401K and apply that money toward your debt. After your debt is paid off, then you put that money back into the 401K again.

Should I take money from my 401K to pay off my debts? I do not mind the fees.?

It would be smart to calculate which way your cash flow would change if you did what you said. Invading a 401 k incurrs a 10% gov penalty, just like an IRA withdrawl right? But if the credit card debt rates are above that, it could work. But THEN you MUST destroy the credit cards and not climb back into the $4400 hole again.

Should I take money from my 401K to pay off my debts? I do not mind the fees.?

If you do not make enough to pay off your debts STOP SPENDING MONEY YOU DON%26#039;T HAVE!!!

It%26#039;s easy, really.

Taking money out of a 401(k), though people do it all the time, is just STUPID!!!!

How much cash do you have in your purse/wallet/pocket right now? If I gave you the choice of flushing half of it down the toilet, or waiting until later and getting to keep it all, which would you choose?

Should I take money from my 401K to pay off my debts? I do not mind the fees.?

As mentioned above, taking a pre-qualified distribution of your 401K is not very wise. However, if you have to in order to pay off a very high interest credit card loan, then you may consider borrowing against it. Some employers allow this AND the interest that you pay for the loan, goes back to the 401K. Check with your employer on this to see if you have this or other options. It%26#039;s much better than taking the 10% penalty.

I won%26#039;t give you the lecture on how important it is to save and pay off credit cards immediately.

Good luck!

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