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1. SHOULD I BORROW FROM MY 401K HOW TO
2. SHOULD I BORROW FROM MY 401K SOFTWARE
3. SHOULD I BORROW FROM MY 401K FREE

In hindsight, Nitzsche says he would have handled his credit card debt differently, such as reaching out to the specific issuers to inquire about a financial hardship plan or participating in a debt management plan through a credit counselor. "If you have a long investing timeline and access to other options, you should explore that first before a 401(k) withdrawal." What you should do instead to pay off your credit card debt "You may be taking high losses on your investment and before the chance of a market recovery," Sokunbi says. "But it wouldn't be recommended to take it out to satisfy non-essential expenses, like credit cards or other loans," Nitzsche says.Ĭonsider also the opportunity cost of withdrawing your retirement savings during a market decline. To explain, Select spoke to a second expert, Bola Sokunbi, a certified financial education instructor and author of " Clever Girl Finance," about what pulling out your savings in a temporary downturn could mean. The only exception when it would make sense to withdraw early from your 401(k) during this penalty-free period would be if you absolutely needed the funds for basic survival, such as for housing or food. "Plus, early withdrawals tend to negatively impact your tax return."

"Many of us have already seen a significant drop in our 401(k), and taking money out - even without the penalty - will only further set back your retirement savings goal," Nitzsche says. Why he doesn't recommend you do an early withdrawalĮven in the case of the recent stimulus package, which relieves Americans of the penalty fee when withdrawing from their 401(k), there are still taxes that will be applied. "I knew that I wanted to do everything possible to stay in good shape to keep my home because I had just bought it a year before and obviously had a lot of pride in home ownership."īut now that over ten years have passed, Nitzsche is still feeling the effects of his decision, and he's not sure he would encourage someone in a similar scenario to do what he did. "That decision was largely done out of just panic and prioritizing," Nitzsche says. Nitzsche tells Select that it was a decision he likely would not make again. But one of the biggest decisions he made was completely tapping into his retirement savings - what he estimates was about $20,000 at the time - to pay off his credit cards. Louis, MO, home at the time to split mortgage and utility payments. He made some lifestyle changes, such as having three others live in his St. He is 40 now and a self-proclaimed "credit junkie" with a credit score over 800, but in 2008 when he was in his twenties and laid off from his job, he was burdened with having to pay a mortgage on a new home, just over $20,000 in student loans and over $10,000 in credit card debt.

SHOULD I BORROW FROM MY 401K FREE

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SHOULD I BORROW FROM MY 401K HOW TO

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SHOULD I BORROW FROM MY 401K SOFTWARE

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