Cashing IRA to pay off Credit Card debt

I have a cc debt I would like to pay off. I was laid off from my job the year I turned 55. I rolled the money in 401K to IRA r/o and was wondering if I could withdraw without 10% penalty

Hi cgmarte,

Generally, you cannot borrow money from your IRA account. In case, you're looking for a short-term source of money, you can borrow it from your IRA account. However, you'll have to repay those funds within a 60-day period.

If your interest on your credit cards is 20+%, then that is a heck of a lot more than you are going to pay in penalty and taxes if you withdraw from your IRA to pay off credit card debt that carries a very high interest rate. Sometimes you just have to do what is best for you. If you are constantly paying out everything you make towards credit card debt, you will never be able to make deposits to your IRA or any other retirement vehicle. That's just my opinion. I'm considering doing this as well.

I posted a question on this forum yesterday and now it is gone....Is this normal???

Hi fdxorf,

Your query has not been deleted. You can find your query and it's reply at:
http://www.mortgagefit.com/credit-rating/about43402.html

Thanks

I am 45 and have $55K in a IRA and little over 5K in 401K. I would like to cash out 25K from IRA to pay credit card debts (appx 27K). Is it a good idea ???

Hi Kharkhowa,

It is not a good idea as you'll be liable for paying 10% penalty if you cash out your IRA before you reach the age of 59 and 1/2 years.

Thanks

What about paying off my $23,000 credit card balance from my IRA monthly over a 2 year period so not hit as hard on taxes. I am 62 and lost my job and my unemployment is not enough to cover all my bills...What are you thoughts.

Hi Alyce,

I don't think IRA monthly withdrawal will be a good option. Nevertheless, you should contact an attorney or a tax adviser and take their opinion in this matter.

Thanks