Taking money from retirement to pay off debt?

[djthegreat88]

Have a 403B account with $40,000 in it. Have an annoying amount debt and baby on the way. Not struggling or anything but my life would be so much easier if I could pay off my car note ($18,000) and CC balance ($10,000). Only debt besides student loans which, I don’t give a fukk about and my wife's new car which she pays the majority. Is it worth it to pull from retirement? I know I’ll get 10% penalty and add taxes from more income.

After the baby is born and I’m leaving this job anyway. Just staying now for scheduling flexibility, have a ton of PTO, and want to keep wife on coverage until after delivery. Im an RN make little over $100,00 in Houston

And I’m truly skeptical if I’ll ever truly be able to retire the way America is currently going

Got a meeting with fidelity person a work next week.
Just wanted regular coli breh opinion

 

[YouMadd?]

it depends on how much debt you have and how much it will help your credit.

You’ll be paying at least 30% fed+state+early withdrawal fee so you’ll have to take out MORE than what your debt it in order to get rid of it and then next year you’ll have to file that 1099R

I know this because I took some of my 500k retirement and paid off my 50k of debt.

I really don’t think you have enough in your retirement to cover your debt.

At best you can maybe take enough out to cancel your largest bill.

 

[djthegreat88]

it depends on how much debt you have and how much it will help your credit.

You’ll be paying at least 30% fed+state+early withdrawal fee so you’ll have to take out MORE than what your debt it in order to get rid of it.

My credit is in 780s. Texas doesn’t have State taxes.

Just can barely save right now without working OT. Getting annoying.

Its not to cover everything. Mostly just the car

I’ve learned my lesson with CC. Don’t have a spending problem anymore. Just recovering from bad decisions when I was younger.

 

[BigMoneyGrip]

it depends on how much debt you have and how much it will help your credit.

You’ll be paying at least 30% fed+state+early withdrawal fee so you’ll have to take out MORE than what your debt it in order to get rid of it and then next year you’ll have to file that 1099R

I know this because I took some of my 500k retirement and paid off my 50k of debt.

I really don’t think you have enough in your retirement to cover your debt.

At best you can maybe take enough out to cancel your largest bill.

Is this from your 401k or deferred compensation?

 

[YouMadd?]

My credit is in 780s. Texas doesn’t have State taxes.

Just can barely save right now without working OT. Getting annoying.

I’ve learned my lesson with CC. Don’t have a spending problem anymore. Just recovering from bad decisions when I was younger.

I feel you… you will still have to pay 20% Federal and a withdrawal fee… so you’ll have to take out more than the amount needed to pay the debt

 

[YouMadd?]

Is this from your 401k or deferred compensation?

Mine was a 401k, I hear great things about deferred compensation plans though. Seems like the better option

 

[Chrishaune]

For sure get rid of that credit card debt. I don't know what interest on the car loan looks like, but at least get rid of one of them.

Always remember the debtor Is slave to the lender. This country is built to get people in debt so they have to work.

 

[MikelArteta]

life is short none of us are guaranteed to live til a retirement age

 

[Sir Richard Spirit]

I thought you could only borrow 50 percent? Then you have to pay it back. I wouldn’t touch it.

I would file bankruptcy before touching mine.

 

[ORDER_66]

I didn't know you could do this?!? aren't there penalties for digging in it before retirement???

 

[YouMadd?]

I thought you could only borrow 50 percent? Then you have to pay it back. I wouldn’t touch it.

I would file bankruptcy before touching mine.

He’s talking early withdrawal, or taking a loan.

 

[YouMadd?]

I didn't know you could do this?!? aren't there penalties for digging in it before retirement???

Generally you can early withdrawal and you get penalty taxed along with the standard fed and state tax. If you had a good plan, during covid you could early withdrawal without penalty due to “economic hardship”

 

[djthegreat88]

I didn't know you could do this?!? aren't there penalties for digging in it before retirement???

Just get penalty and taxed heavy

 

[east]

that 40's gonna be like 20 after taxes/early withdrawal fees and it'll fukk ur tax return next year

u should do this only as a last resort, look into 403b loans as an alternative

be wary of the fidelity advisor unless ur paying them by the hour

 

[Sad Bunny]

Never a good idea.