My husband was laid off this summer and we're behind on our mortgage. Not enough to be in jeopardy, in fact, only by one month. It is causing an additional $60 late fee each month, but we just cannot get caught up. He has since found a new job and we are now struggling with whether or not we should rollover his 401K with the new employer, or should we take the money and catch up on our mortgage?
2007-09-24 01:11:29 · 3 answers · asked by georgia_peach 2 in Business & Finance ➔ Personal Finance
i always recommend catching up on any debt before starting to save/invest...it's only logical to think that way. plus, it'll give you some peace of mind.
2007-09-24 03:58:29 · answer #1 · answered by mazda6drvr 2 · 0⤊ 0⤋
If you cash out his 401k it will be subject to income tax plus a 10% penalty.
Due to taxes and the penalty it is possible to lose close to 40% of the value of the 401k depending on your other income.
Only you knows what is best for you. If you would sleep better at night, cash it out and get caught up on the mortgage.
2007-09-24 01:50:48 · answer #2 · answered by Wayne Z 7 · 0⤊ 0⤋
Check with the investment company who manages your money. I think you can "borrow" or take an early withdrawl from your IRA or 401K for 60 or 90 days? and put it back without tax consequences...If that is enough time to get you caught up, it may be something to consider.
2007-09-24 02:08:12 · answer #3 · answered by Christiane 3 · 0⤊ 0⤋