Hit the Credit Card 401K. Sometimes there is a sense of panic that arises when you see your credit card bill begin to lose control. You can switch to a second mortgage when you are new enough. But then you have made your home on line and now it will be dangerous if you default on the bill.
This is a pile of debts that can be used to try and fight some important decisions. It's a good idea to withdraw your money or borrow your 401K to get enough money to try to reduce your debt level.
So it's a decision whether this idea is a big gamble because if you win, you can eliminate debt completely. But if you lose, there will be protection for your seniors for years and maybe a small nest that you want to share with children as an inheritance.
So immediately if you withdraw your pension fund to pay or your credit card debt, you lose money because of the penalty and tax. You might want to calculate how much you can save because the penalty for being compared to interest is therefore a big payment just to get the fund.
The logic to hitting 401 is that you will save more money than you make from investment. But there is a strong logic to leaving the pension fund in the right place. For one thing, debt will come and go but retire goes and never returns.
After you withdraw the pension fund and give debt money to your credit card, your pension will be lost. But if you want to take care of credit card debt and leave your retirement alone, it's there for you and you have a sense of ownership that debt hasn't taken everything from you.
One possible alternative is to borrow from your 401K and use it as collateral. Now in this case you are still exchanging debt for debt. However, debt is often a profitable interest rate and you can achieve it so that interest rates do not float like credit card debt. So there are several rationales to take that route. But if it is a choice, you still place a very important part of your financial future very carefully. https://bit.ly/2DTFoEm
This is a pile of debts that can be used to try and fight some important decisions. It's a good idea to withdraw your money or borrow your 401K to get enough money to try to reduce your debt level.
So it's a decision whether this idea is a big gamble because if you win, you can eliminate debt completely. But if you lose, there will be protection for your seniors for years and maybe a small nest that you want to share with children as an inheritance.
Get Rid of Credit Card Debt
Hitting 401K to pay off your credit card is a bad idea for many reasons. The most obvious reason is that your pension is deferred so that when you put it in that account, you don't pay any tax to it. You don't need to pay taxes until you issue it. If you take it out, there is a big penalty that you have to pay.So immediately if you withdraw your pension fund to pay or your credit card debt, you lose money because of the penalty and tax. You might want to calculate how much you can save because the penalty for being compared to interest is therefore a big payment just to get the fund.
The logic to hitting 401 is that you will save more money than you make from investment. But there is a strong logic to leaving the pension fund in the right place. For one thing, debt will come and go but retire goes and never returns.
After you withdraw the pension fund and give debt money to your credit card, your pension will be lost. But if you want to take care of credit card debt and leave your retirement alone, it's there for you and you have a sense of ownership that debt hasn't taken everything from you.
One possible alternative is to borrow from your 401K and use it as collateral. Now in this case you are still exchanging debt for debt. However, debt is often a profitable interest rate and you can achieve it so that interest rates do not float like credit card debt. So there are several rationales to take that route. But if it is a choice, you still place a very important part of your financial future very carefully. https://bit.ly/2DTFoEm