401k--don't touch?

iVillage Member
Registered: 07-04-2009
401k--don't touch?
10
Mon, 10-19-2009 - 7:16pm

I think I could wipe out my CC debt if I cashed out...yes the penalty is ugly.

What are your thoughts on this?







iVillage Member
Registered: 05-09-2005
Mon, 10-19-2009 - 11:22pm
No, don't touch it. It's not just the penalty for early withdrawal and the taxes you would also pay -- you need to know that no one can touch your 401K -- not even in bankruptcy. It would be a really bad idea to use your untouchable money for an unsecured debt like a credit card -- if you ever declared bankruptcy your 401K couldn't be touched, not even to pay your credit cards. Plus, as most folks here would tell you, almost always, folks run the credit cards right back up after paying them off with a loan -- whether the loan or cash out is from the 401K or a home equity loan.
LEAVE IT ALONE. Don't even think about it.
Post your numbers if you would like the folks here to help you find ways to save more $$ to put on the c cards.
Megan
iVillage Member
Registered: 04-12-2007
Tue, 10-20-2009 - 6:54am

ITA with what Megan said - don't touch it.


As well as the tax and penalty implications, just think of all of that compounded interest you'll miss out on in the years to come.


Robyn


iVillage Member
Registered: 04-10-2003
Tue, 10-20-2009 - 7:56am

I agree with PP's. Don't touch it. You can do this. Strong will and hard work will make it happen!!!


I can't remember if you've posted numbers before, but if not, feel free to do so and we can help you come up with ideas to cut back!


Bex -


"Yesterday is history, tomorrow is a mystery, today is a gift -thats why its called the present."


Bex -

Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
Tue, 10-20-2009 - 8:08am

Just to wipe out the CC debt, then no I wouldn't touch it.


If there is more to the story, then it depends.

iVillage Member
Registered: 11-14-2008
Tue, 10-20-2009 - 12:41pm

No don't do that. You are doing great with your debt reduction. Be patient, and when you are done, you can save more and still have your 401 K.


iVillage Member
Registered: 10-01-2008
Tue, 10-20-2009 - 3:07pm
The only think I would even consider is borrowing from it.

Norma


"Patience is the best remedy for every trouble"- Plautus


iVillage Member
Registered: 07-04-2009
Wed, 10-21-2009 - 9:46pm

Ok thanks guys, I won't do it....I don't want to...I have a deadbeat ex so my income is all there is.

I will post my numbers, income/debts/bills this weekend, thanks for the offer to take a look!

Thanks again! -Kim







iVillage Member
Registered: 03-15-2005
Wed, 10-21-2009 - 10:03pm
Double check the withholding.

Jennifer


 


iVillage Member
Registered: 02-19-2003
Thu, 10-29-2009 - 9:16am

Hi there,


Carmen Wong Ulrich recently answered a similar question.


Withdrawing from Your 401K Without Paying Penalties


http://housecalls.ivillage.com/home/archives/2009/10/withdrawing-from-your-401k-wit.html



iVillage Member
Registered: 09-30-2009
Thu, 10-29-2009 - 1:56pm

Hi-


I have borrowed against my 401K twice.