Related Posts
Is firm travel back up to pre covid levels?
In Soviet Russia, bathroom smell YOU
How is the Torrance area?
What are your book recommendations?
Additional Posts in Personal Finance Bowl
Thoughts on personal loans to consolidate Debt?
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.




I would highly advise against this, unless the debt has criminally high interest rates or you are facing imminent homelessness. Even then, debt consolidation is likely to be a better avenue than taking a huge hit on your retirement funds.
Retirement vehicles such as e.g. a 401k benefit enormously from compound interest, so taking funds out early will do huge damage in the long run.
Okay here is my suggestion as I did this to pay down my student loans, which were insanely high with insane interest. Instead of entirely withdrawing from your 401k which would cause a taxable event, take a loan from the 401k. Use that money to pay off your debt. That will eliminate the debt and prevent any taxes from hitting you. Then as you repay your 401k loan, you'll actually repay the interest back to yourself. It's a great way to utilize your 401k to burn down debt without exposing yourself to a tax penalty, and you get to earn the interest 😉
Yes this is true
I have suggestions. How much is the 401k and how much debt?
Roth 401k is at about 44,000 and debt is around 30,000
Conversation Starter
For Roth IRA just don’t withdraw more than you contribute is sufficient