Reply to TSP: financial hardship withdrawal

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Why not?  Wouldn't the benefit of putting $1200/month towards a tax-deferred account outweigh the costs of servicing 50K in credit card debt?  I know the conventional wisdom is to not touch retirement accounts, but doesn't this advice apply more to people with more robust accounts (60K isn't a lot of money)?  With maximum contributions we can get back to 60K within 3 years.  And I wouldn't expect to lose out too much on compounding interest over the next 3 years---if the next 3 are anything like the past 3.  [/quote]

Well for one thing, $60K in TSP money isn't going to wipe out $50,000 in debt. You might net $29,000 once you pay taxes and the penalty.

Also, excuse me for scoffing at your pledge that you'll have financial discipline now. You ran up $50,000 in cc debt. Why not just take all that money you were going to theoretically invest in your depleted TSP and just pay off the debt? You didn't get $50,000 in debt overnight, and you can't pay it off overnight, short of a windfall (and this doesn't count).

Don't compound your financial irresponsibility with another stupid mistake.[/quote]

Sorry, make that $39,000. You'd lose $21,000 to taxes and penalty.[/quote]

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