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Is 401k Borrowing a Smart This to Do to Pay Off My Credit Cards? – Roxanne

“Dear Damon,

I am 40 years old and am currently unemployed after leaving a great position to spend time with little ones. I now am regretting decision with the bills that are piling up. My husband and I had banked on him getting a promotion, but now we are forced to live off of his $35,000 salary and support 3 kids. I have $175,000 in a retirement account that I am wanting to take out at least $25,000 to float until I can get a new job. I realize there would be a tax penalty. Our credit card debt totals about $20,000.

Should I take out more to pay off credit card debt and use balance to float? I know I will get a job eventually, but I didn’t realize it would be so tough. Thanks

Roxanne”

The Answer

Roxanne,

That is a tough call and a difficult one to answer without a complete financial picture. Are the credit cards maxed out?

Before making a major move like an early withdrawal from a retirement account, you should consider setting up a one on one phone consultation with me so that I can review the overall situation and discuss other possible options to minimize or eliminate the need to withdraw funds from the retirement.

Damon is a talented independent debt coach that provides in-depth assistance and consultations for people struggling with debt. If you want a personal debt coach to help you through a difficult situation or want assistance to find secret discounts offered by debt settlement companies I think Damon Day is an excellent person to contact for advice and assistance. He can be reached directly at DamonDay.com

If you have a debt related question you’d like to ask, just use the online form.

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About Damon Day

Damon Day
Damon Day is a talented Debt Coach who offers fee based consultations to consumers as an alternative to the typical free debt relief consultations which are nothing more than thinly veiled sales pitches lacking any real information to help a consumer make a good decision. You can learn more about how he can protect you from getting ripped off at DamonDay.com

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