I have a large amount in 401K and this student loan is more than the 401K and it is a huge huge burden on my life. Would you withdraw the 401K to pay off this worthless debt ( I 'm a little pissed about it because its gotten me nowhere) or would that be a bad idea. It is such a burden to me.
2007-06-20 19:18:46 · 5 answers · asked by Mary D 2 in Business & Finance ➔ Personal Finance
A very bad idea the 401K early withdrawal will cost you a 10% penalty plus tax at your marginal rate and state income tax so you could lose as much as 40% to taxes.
I am sorry you didn't find your education useful but the debt is still yours to pay. If your interest rate is low pay the minimum if the rate is high send every cent you can even if you have to live with parents or rent instead of buying a home.
Is there a way to get some use from your degree?
2007-06-20 19:23:39 · answer #1 · answered by shipwreck 7 · 1⤊ 0⤋
First. of all if you still have student loans you 401 k probably after taxes and penalties may not be enough to pay off the loans.
Second. In an emergency like illness there are no penalties to withdraw the 401k. And you may really need the money to eat and if you default on the loans you can deal with the consequences when you get better.
Third. You probably couldn't find a lower interest rate than a student loan and I am sure the 401k is earning more than the loan is costing you.
Weigh it all out an decide.
good luck
2007-06-20 19:29:42 · answer #2 · answered by Susan T 2 · 0⤊ 0⤋
Don't withdraw your 401(K). Just pay as much as you can on the loan per month, but not so much that you can't enjoy life. Since it's gonna take a while to pay off the loan, your life should still be lived to the fullest - don't let any loan or bills take away your happiness. Just work through it, you'll be ok.
2007-06-20 19:25:35 · answer #3 · answered by Anonymous · 1⤊ 0⤋
it quite is probably purely a rely of which one is greater important perfect now. individually i could decide for the domicile, reason no longer purely are expenses low ... so are domicile expenses. In 2 years the industry would desire to o.k. turn around and expenses bypass decrease back up.
2016-09-28 05:24:22 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Whatever you do please do not take out your 401k early..........You will regret it later down the road. Make payments every month and do the best you can.
2007-06-20 19:28:08 · answer #5 · answered by Anonymous · 0⤊ 0⤋