Should I raid my 401K to pay my credit cards off?
December 27, 2012 2:45 PM Subscribe
Can someone talk me out of raiding my 401K to pay off an exorbitant level of credit card debt?
posted by anonymous to Work & Money (41 answers total) 2 users marked this as a favorite
We have ~50K in credit card debt. And 25K in student loan debt. I have a good job, and we pay all our bills monthly, but the fact is we built up a tremendous amount and it never goes down. And the holidays meant the short term laughter and smiles of relatives seemed worth more than undoing a bit of the year's progress.
The reasons for the debt are many, and tired and predictable. However, in the 4 years we've been married it's not grown by any appreciable amount, but also not shrunk.
I'm relatively confident that I could cancel all but 1 card and we'd never build it back up. I won't promise it, because I never pictured myself here to begin with. And I hate lying.
My 401K is ~80K, so I figure after taxes and penalties that would pretty much annihilate the credit card debt. I feel like I could double my contribution and rebuild the base value in a few years. And money never in my hand is not used for 'fun' and rationalized away. (We're in our early 40s)
Is this a dumb idea?