Is Using Money From Your 401K To Pay Off Debt A Wise Choice?
October 3, 2008
I’ve had several people ask me recently if it’s a wise move to withdraw money from their 401k to use to pay off credit card debt. So let’s look at some of the pros and cons…
The first thing you need to consider is the fact that you’ll have to pay income tax on the money you withdraw, as well as a penalty in some cases. So you could be “losing” 25-30% right off the bat, before you receive any of the money yourself.
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