0Credit Card Balance Balance Transfer With No Fee 15 Months

I know Fin. Planners say don't rob your 401K to pay off credit ...

Cards. But, I don’t understand their system $-wise. Now, I totally get that most Americans don’t hit the develop to spend for withdrawal and demoralizing it for THAT think is wise. But, I AM rattling disciplined and erst this debt is paid off would build my 401K. Factoring in my dedication to build the 401K, ground should’nt I turn my debt today by using that money and re-build later?

The best thing to do would be to get the best (lowest) rate you can, payoff as much as you can as quickly as you can and do not add anymore charges. It may take you a while, but it will be worth the effort.

Since your 401K won’t pay off your bills, why bother

If you insist on doing this, borrow as much as you can rather than withdrawing the money. At least the interest you pay replenishes your account.

If you withdraw everything from the 401K will the employer close your account? Will you lose matching contributions? You certainly will lose the power of tax free compounded growth.

The only real way most people can save enough for retirement is to maximize the use of tax shelters and take advantage of time. If you take the money out of your 401K you are losing the time advantage. You are cutting down the amount of time you have to allow your money to grow through compounding.

Figure out how long it will take you to get your 401K back to $10K. Figure out how much you lose in matching contributions and figure out how much tax free compound growth you will forfeit over that time period. I think you will see it makes more sense to leave the 401k alone.

Aside from the discipline required to save that you mentioned, you may create additional tax liabilities if you cash-in your 401K in order to repay your credit cards (and penalties). In addition, in the event of a personal bankruptcy, your 401K is protected from creditors. This in itself may be very valuable and reason enough not to tap into the account. Checkout the following site for more information on 401K and IRAs:

http://www.taxdeferredstrategist.com/

If you are set on using the funds in your 401K to repay your debts, check your plan since you may be able to borrow against your 401K. The interest that you pay on the loan typically will go back into your account. However, there’s an opportunity cost involved since you will earn the loan interest, but you will forgo any returns on other investments like stocks (effectively the loan becomes the investment).