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Is the real estate market slowing down?
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Rising Star
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The next $GME is DOGE.
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Not at all. Never raid pension unless you have access to pension cash. Why don’t you use the all the cash to pay it off?
Pro
You can pay off the loans today, and still have several months of expenses in cash?
Do that or pause on funding your cash accounts further and put it towards the loans if you don’t want to shrink your cash pile.
Definitely don’t do the 401k - it’s a pain in the ass if you have an *unplanned* job separation.
Similar ish situation as you there is a SO involved on my end.
What I’ve determined our approach is:
1) don’t touch retirement and keep saving by maxing out
2) keep saving on the house
3) refinance those mother f’n student loans down to like 3% ish. I think SoFi could get you there. And just pay this down over time so you can max the TVM on your savings for retirement.
I don’t know your income or COL/geography but it’s almost scary how much you will get approved for a mortgage even with the student loans.
Rising Star
My god. Just pay it off today, you will still be left with 30k cash. And leave your retirement accounts alone. Why go through all the hassle?
If you want to borrow money from your 401K you’ll just move your loan from one side to another, even though you’ll paying off 401k back to yourself with interest.
So theoretically, if you are paying interest to yourself instead of bank, there may be an upside to it.
Pro
Rule of thumb is 1x salary around age 30, but you can catch up easily with a well defined savings plan or budget
Pro
What’s the interest rate on loans
How long is that interest rate good for?
To clarify, I’m not dipping into my 401k. I know there are fees and other things associated. What I am considering, is electing a lump sum payment of a pension plan I didn’t even know existed to pay down my debt and then focus my attention on additional future savings. Does that make a difference?
Pro
I think most people don’t have DB plans, so lump sum may be a good option.
At age 32, I’d take the money now since god knows if you’ll ever see that money. I’m assuming it’s a fairly small amount.
I’d suggest taking a loan from your own 401k. Most plans allow this with minimal fees. You pay the interest back to your account, and only in the event that you “default” is when it becomes a taxable distribution; otherwise, no taxes are involved at all. You’re able to take up to 50% of your balance or $50,000, whichever is lower.
The only downside is the money you take out isn’t in the market while you’re paying back the loan, but that just encourages you to pay it back as quickly as possible. Also the mandatory interest kind of offsets a little bit of that.