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”

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

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