Reply to I need to cash out my 401k

Forum Index » Money and Finances

Reply to "I need to cash out my 401k"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous]So I called the Plan again today  and they said stated that my balance was 12599. If I cash it out,  they will retain 20% for federal taxes and 4% for Va state taxes and at the end of the year I will have to pay more if the IRS decides that it wasn't enough or get some money back if it was too much.  I am really torn about this decision.  [b]On one hand I feel like it would be so easy to just cash this out and pay off my debt.  [/b]On another,  I am not totally sure it's the right decision :-([/quote]

Cashing out the 401k would be the easy way out of debt, but won't ensure that you don't get back into debt. $7k in debt isn't actually that bad. We're working our way out of more than $50k (now down to $17k). You say that in Sept. you'll have $600/mo to save/pay off debts - it would only take about a year (+/-) to pay off $7k with $600/mo. Plus you might have another few hundred in other savings pointed out by previous pps. In order to ensure you don't get back into debt you have to change your behavior and that takes time and discipline.

Put aside $1,000 of the money from your found savings account and use the rest to pay down the lowest balance card. Pay minimums on everything else. Every extra little bit goes to the lowest balance card, until it's gone. Then move on to the next. You will feel so proud of yourself if you work through this debt. You can do this! [/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics