Anonymous wrote:

Anonymous wrote:Don't do it! I regret doing so. I was told I wouldn't owe a penalty and did.

How did you owe a penalty? I thought anything you put in could be taken out, as long as its been 5 years...

<face palm>

How do people not know this?

Anonymous wrote:Don't do it! I regret doing so. I was told I wouldn't owe a penalty and did.

How did you owe a penalty? I thought anything you put in could be taken out, as long as its been 5 years...

Don't do it! I regret doing so. I was told I wouldn't owe a penalty and did.

Anonymous wrote:Once you get your bonus, call up whoever you owe the medical debt to and negotiate. Tell them if they cut the amount you owe down to 1/3 to a half of the total, you will pay it off right now. If you owe multiple people, pay off whichever one will give you the biggest "discount." This really works. Don't take money out of your retirement account.

This. Don't take out of the Roth! Just get on a payment plan and pay away. You could use some of your emergency savings too. (And keep working hard, and you'll get another bonus soon!)

what is the interest rate on the debt? You are probably better off with $5k in emergency (and a low savings interest rate) and no debt than 5k in debt at 6%+ interest.

unless your job is completely unstable, I would just pay it off, and then use the next few months/years to beef up your emergency savings.

if you mean stop contributing to roth until you are out of debt, then yes, do that.

If you mean take it out of the roth account, then no, don't do that.

Agree with previous posters that a 3k gross bonus is like 1700 net, and that you should negotiate the medical debt with the hospital, and that you should then agressively pay that off. $4-5k more in the grand scheme of things, at 28, is not that bad. You are doing well OP!

Once you get your bonus, call up whoever you owe the medical debt to and negotiate. Tell them if they cut the amount you owe down to 1/3 to a half of the total, you will pay it off right now. If you owe multiple people, pay off whichever one will give you the biggest "discount." This really works. Don't take money out of your retirement account.

You can put money back in the emergency fund, but you can never get hthat money back into the roth without using up a new year's worth of contribution limits. I wouldn't touch the roth.

The government steals a lot of the bonus because of higher percentage , its bullshit but you should get some back at tax time. You can withdraw whatever post tax contributions with out penalty.

BTW, OP, if your bonus is $3,000, is that net? Because if that is a gross figure, be prepared to see only about $1,900 in your bank account when it is deposited. There will be 25% tax withholding on it ($750) plus FICA and any state tax due.

Don't do it! Try to tighten your belt if you can and pay down that debt out of income, or from your emergency savings if you absolutely must, but do not do not touch your retirement funds.

Anonymous wrote:I would use the emergency fund. You can always pull from the Roth later if necessary.

This. Why would you pull from the Roth when you have an e-fund?

no. never pull from retirement funds unless it is truly the only option. Find a 0% card to transfer the balance to and make payments, treat it with priority to pay it off quickly!

I would use the emergency fund. You can always pull from the Roth later if necessary.

So I have debt on a cc due to a medical issue and life that is finally over but looming over my head. We are living very tightly, but within our means and no other debt besides mortgage and this medical debt. The debt is about $7000. I am getting a bonus this month of about $3000 so that will make a dent, but I'm thinking about taking out about $4000 of my roth contributions to cover the rest. I have an emergency fund of about $10000 (not enough!!) but I feel worse touching that then the roth contributions. I have $38000 in there total, $22000 of which are contributions. I am 28.

Should I do it?