401k Question?

Question

I am interested in completely withdrawing my 401k to pay off my high interest credit cards. Is it possible to do that. I don't care about any taxes or penalties involved. Just tell me if its possible and how I can do it.

Answer 1

If you still work for the company, you can't.
but you can borrow from it with the interest that deposit back to your account. Technically, if you withdraw the money, it is not wise to do it
your credit card may have interest 18-20%
when you withdarw from 401k before 59 and 1/2, You will have 10% penalty+ atleast 20% income tax withhold for IRS
18% with 30% compare is not wise

Answer 2

It is possible. Unwise, but possible. I agree with Nefarious Eyes - borrow from it if you can. Talk to your company's 401K rep, or your accountant, or your banker. Don't forget the IRS taxes it as income, plus the 10% penalty. So, if you are in the 30% bracket and take out $100,000, put $40,000 aside for taxes next April or you'll have to put the IRS bill on those high-interest credit cards.

Answer 3

Don't cash out...

Borrow the money from your 401k and then pay the interest back to yourself.

(of course this may not be possible if you had no control of the credit card charges you made and went WAY over what you should have charged :) )

To "cash out" go to the web site for your 401k and see what you have to do.

Answer 4

bad idea to do...just call some credit counselor and have them
deal with the Credit card company, many times they can get the Interest remove, so all you pay are what you owe the CC.

Taking those money from a 401k seems to be the best choice but in the long term, it's going to hurt your retirement $$

Answer 5

You can borrow the money from your 401k and the interest you pay goes to your 401k account. In short you are borrowing money from yourself.