I'm 31 years old. Is itse to take the money I have saved or in my 401K/retirement plan to clear debt?

Question

It would clear my debt and credit but leave me with only a few thousand dollars. I'm about to switch jobs and just wondering if I should do that.

Answer 1

If you take the money out of your 401K they are going to tax you on it.  what you should do is borrow against it the amount you need which can't be more than 1/2 of what you have in there and then have your employer take a payment you set up with them out of your paychecks.  It's really easy to do and when you retire you will still have the amount plus what you put in from now on.

Answer 2

First, if you take money out of your retirement account, there will be a penalty attached (at least 10%).  Second, you are draining what you will need to live on in retirement and essentially starting over having lost the years you put into building the retirement.  rather than draining the retirement accounts, why not budget your money so you can pay off your debts.

Answer 3

You can take loans against your 401K usually with very low interest (that you pay to yourself)  See if you can do this before you just take money out.  Then you will still have your savings plus you will get your debt paid off and have way lower payments.  Good luck!

Answer 4

NO.  Clear your debt in other ways.  You are penalized financially and you should never touch your 401 except for extreme emergencies.