we are a family of 5 on a full time teacher's salary. We had some financial issues with our insurance (not our fault) and our Christmas credit cards (our fault). We can't seem to catch up. We work very hard, she has a part-time job, and I have 2. Should I tap my 403B? Is that even possible? Is it stupid? If we can get back on budget, we can be ok, but with everything behind, we need a grand or 2 to get back on track.
Any ideas/ advice. Thanks in advance.
2007-01-11 12:28:58 · 5 answers · asked by Anonymous in Business & Finance ➔ Credit
Annuities typically penalize investors who bail out. During the first few years of the contract, you may have to pay surrender charges if you transfer your money elsewhere. Often the surrender fees start at 7% or 8% and decline by a percentage point every year. If you switch employers and move the money out of an annuity with a surrender charge, you will have to pay the penalty. Certain surrender fees, however, refuse to vanish. You'll typically discover this nasty surprise with "two-tier" annuities. With one of these, you'll pay a penalty if you decide not to annuitize your payments upon retirement. If you prefer to withdraw your money and invest it elsewhere, you can, in some cases, face a 20% or higher penalty. Unless you're approaching retirement age, it's best to flee from a two-tier annuity, Shine advises.
2007-01-11 12:35:07 · answer #1 · answered by charlie2900 2 · 0⤊ 0⤋
I'm the spouse of a teacher so I can feel your pain.
You can't tap the 403(b) unless they allow loans against it. The insurance issues might allow you to qualify for a hardship withdrawal but not if you've already paid that off and it set you back..you can only take the hardship to pay off the original debt. You don't say that it's still outstanding....
As for whether it's a good idea? Look, you have to be able to sleep at night...but from the numbers you are talking about you're really not that far in debt. Take a step back and ask yourself if paying off part of this debt is worth $12,500. That's what every $1,000 you take from your 403(b) will cost your retirement account. If you take 3k now...that's an extra year that you're going to have to work.
Best thing would be to suspend your 403(b) deductions for a while. If you took the hardship, you'd have to stop the deductions for 6 months anyways! Next best thing would be a loan...it's just shifting the debt load but you're paying yourself interest and there's a definite end to the payment. But, please do not take the hardship...sometimes a little angst is not worth the long time damage that it will do. It's not stupid to take it because it will lighten your emotional burden. But, it's about as close to it as you can get because of the damage to your retirement.
2007-01-15 16:12:46 · answer #2 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋
I do not think tab into 403B is a good idea as those are your retirement money. What you might want to do is apply for a home equity credit. This type of credit line usually has a lower interest rate than credit cards. In addition, the interest you paid could be tax deductible, too. Thus, I would suggest that you pay of the credit card debt ASAP.
2007-01-11 20:38:29 · answer #3 · answered by Bryan 5 · 0⤊ 0⤋
Have you looked into a refund loan on your federal tax return for this year? This may be just enough to help you get back on your feet. However if you dont have your W2s for the year yet, H & R Block is offering loans based on you final pay stubs for the year. It would be just an estimate of you federal taxes and you would still need to file your taxes once you received your W2s. Good luck and I hope all works out well for you.
2007-01-11 20:35:48 · answer #4 · answered by misskenzie12 2 · 0⤊ 0⤋
two jobs one thousand equals one hundred in my book u or wife get two jobs go back and forth on sitting baby ull be okay twothousand in debt u cant even file bankruptcy rob peter to paul means pay one bill one month all off next bill do same ull catchup
2007-01-11 20:36:29 · answer #5 · answered by sunshine 5 · 0⤊ 0⤋