Advise on early w/drawl of IRA funds ( 1 time penalty)to pay off high int. debt. No mtg to do consol. loan.?

Question

I'm 55, on disability, we rent. this would deplete my IRA accts (various mutual funds & some lame stocks) to only neg yeilds at this time. should we bite the bullet (ie ints as high as 30%) and pay-off as much ea/mo as we can, OR pay the one time penalty (I don't know how much that would be) and pay off all debts above a certain % rate, OR ??? Thanks, in advance, for any ideas, opinions, help---consolations ;D

Answer 1

An early withdrawal of an IRA will mean severe tax consequences. You may can borrow other money from somewhere to pay your bills but there is no such thing as a Retirement Loan. If you withdraw it before age 59 1/2, you will have to claim it as ordinary income plus there is a 10% penalty tacked on for the withdrawing of it that the custodian (fund co., broker, etc.) must collect for the gov't. For your future's sake, don't do it. Good Luck!

Answer 2

probable no longer. i imagine you would nevertheless might want to pay taxes on it. you're surely paying the taxes you would have paid or the taxes you acquire decrease back on your go back once you invested it. that's as once you're earning the earnings this 12 months. i'd advise, once you're wanting to apply this money, is to finish a touch this 12 months and some next. even perchance spread it out over the subsequent few years. Dave Ramsey is the guy so a techniques as debt eliminating. you could digital mail or twitter him. he will provide you with quite reliable, good, and commonly problematical to swallow advice. He would say, do not do away such as your investments dummy, the monetary gadget is poised for boom and also you'll provide up way better than you'll repay. attempt a beans and rice (figuratively speaking) weight-loss application and pay the debt off the former-formed way.