Should I cash out 401k given debt amount?

I am 55 and re-employed after a 4-month layoff. I have $75k in a 401k from previous employer - otherwise no liquid assets. I am remarried with small children. I have ~$40k in credit card debt and cannot afford to live in our home, as my total income now is 26% ($45k/yr) lower. We have accumulated no new debt in tha last two years - but struggle to pay down. When our home sells (it has been on the market for 8 months), I will lose mid-5-figures. I am considering cashing out 401k to eliminate all debt (except mortgage and car payments. Any advice?
gdiercks
Asked Jan 16, 2013
If there is any possible way to avoid cashing this out, such as a temporary second job or spouse taking a job or selling a vehicle, don't cash it out. Although it may seem like a quick fix, you will have a 10% penalty in addition to income tax if you cash it out before age 59 1/2. Additionally, you will have depleted funds set aside for future retirement. Please carefully consider all alternatives before moving forward. If you decide you must cash it out, consult with a tax expert to determine how much you tax/penalty liability will be so that you can set aside adequate funds to pay these. Do not count on the amount that is withheld to cover the taxes and penalties.
SarahK
Answered Jan 16, 2013
I think, you should have to consult for any financial adviser, or bankruptcy experts to liquidate your debt.

Filing Bankruptcy could be your best option! Call us for a Free Consultation.
Visit http://freshstartsolutions.com.au/
Phone: 1300 818 575
Email:[email protected]
aliyahwestling
Answered Aug 27, 2014
I would suggest to try Debt Consolidation Loan. If you've tried this before and it worked then this might be your best option. For more info visit,
Bankruptcy Gold Coast - Insolvency Specialists
Australia's #1 Choice for Bankruptcy Solutions! Call Us: 1300 795 575
Visit Us : http://www.bankruptcyexpertsgoldcoast.com.au/
expertsgoldcoas
Answered Dec 08, 2014
Yes, I agree must to consult the experts advice on what is best for you.
Melbourne
Answered Dec 14, 2014
Consult your attorney for the best option.
wollongong
Answered Jan 11, 2015
401k is a huge amount to pay and regarding on your total income per year its impossible! try to consult a bankruptcy lawyer and ask for advice.
SimonAndrews
Answered Jan 14, 2015
I suggest not to cash it out because that was a big amount. Just find another way to settle your debt or seek an experts that would help you. Visit http://goo.gl/CWN7Kp.
samanthainglis
Answered Jan 16, 2015
Yeah! right consulting an expert is the best thing you can do. http://tldr.me/2v18irrp
katerichards
Answered Jan 17, 2015
401k given debt amount you can go to good advice. For more visit us.http://goo.gl/CN3c6p
alansampson86
Answered Jan 23, 2015

TIP: If it's not your answer to this question, please click "Leave a Comment" button under the question to communicate with the question owner.

Categories