Posted on: 09th Dec, 2010 02:21 pm
I understand that there is a big tax consequence when cashing in an IRA or 401K. With $69,000 in credit card debt due to an out of pocket surgery and some just bad financial decisions mixed in, the interest is absolutely killing us as well and we are able to pay only interest on this amount at this time, so the debt amount never goes down for us. I have $155,000 in IRAs and 401Ks and am very tempted to use part of it to get rid of this card debt once and for all - the monthly interest charges are bleeding us to death. Isn't the interest we are paying on this debt just as bad as the taxation we encounter when cashing out the retirement funds? FYI, I am 56 years old.
Hi Dave!
Welcome to forums!
If you're not 59 and 1/2 years of age, then you will be liable for paying 10% taxes on withdrawal of money from your retirement funds. If you can afford to pay the 10% taxes, then you can withdraw money from your retirement funds.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If you're not 59 and 1/2 years of age, then you will be liable for paying 10% taxes on withdrawal of money from your retirement funds. If you can afford to pay the 10% taxes, then you can withdraw money from your retirement funds.
Feel free to ask if you've further queries.
Sussane
Don't cash them in, borrower against them. That way you'll be paying yourself back the interest, and you'll still have the accounts available to you for retirement.