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Pay Off CC2 with Some IRA Money

6 Responses to “Pay Off CC2 with Some IRA Money”

1. creditcardfree Says:
   August 23rd, 2017 at 09:24 pm 1503523491
   1503523491
   I so understand how annoying debt can be. However, raiding your IRA money to pay it off, despite being able to afford the penalty is not financially wise. Your last post indicated you went on a trip to London. Can't someone who can afford that wonderful trip pay off $8K in credit card debt? At the very least stop your IRA contribution and send that money to the credit card, along with every other cent you can. Start retirement savings again when you have it paid off. This would at least save you the penalty!

2. CB in the City Says:
   August 23rd, 2017 at 10:30 pm 1503527443
   1503527443
   I agree with CCF; I wouldn't raid your IRA. Focusing on that one card is a tangible goal; throw every bit of cash you have at it, cut back in creative ways. It will go faster than you think if you really focus on it.

3. My English Castle Says:
   August 24th, 2017 at 12:13 am 1503533595
   1503533595
   CCF and CB are right. Stop the new contributions and think of ways to throw every cent at it. That penalty money is cash down the drain.

4. snafu Says:
   August 24th, 2017 at 01:38 am 1503538701
   1503538701
   Adding my voice to CCF, CB and MEC hoping you'll reconsider. The whole point of IRA is the wonderful magic of compounding contributions over the long term. The sums earned now will be needed to support your 35 + years of retirement. It's not a pile of money waiting for you to use in an uncomfortable situation. I don't know how clear your crystal ball is, you don't know your future need age 55-65. The reason the government assesses a penalty and charges tax on withdraws is to emphasis it as a poor choice.
   
   Where is all the money going? How can we help you reach your goal? What costs can be reduced short term to pay down debt? What do you have that is no longer used or needed that could be sold? What non essentials can be examined? I'm confident you can solve this problem without jeopardizing long term future.

5. rob62521 Says:
   August 24th, 2017 at 02:31 am 1503541881
   1503541881
   I hope you are paying attention to what these kind folks are telling you...don't take money out of your IRA. Compound interest is your friend and although you'd like to pay off your credit card, you need to find ways to cut other areas to get the money.

6. creditcardfree Says:
   August 24th, 2017 at 01:24 pm 1503581073
   1503581073
   Yea, we pulled you from the ledge! I'm not harping on your for taking a fabulous trip, just so you know.
   So you are looking at a payoff time table of 12 months, right? Your side bar is probably not up to date, but based on the balance from January, you are looking at paying at least $705 a month to pay it off on that time table. It's probably more per month because of interest, guessing $725. What payment are you making now? Deduct that from the $725. That is the amount you have left to find in your budget to make this a reality a year from now.
   
   What expenses do you have that you would be willing to give up for a year? Hair coloring, nails, new clothes, magazine subscriptions, specialty foods, eating out...are any of these a possibility?
   
   How much is your IRA contribution? If you cut that out will it meet the amount you need. Beware that this could change taxes though. Which brings up that if you get a large refund, you could adjust withholding to get a smaller refund and put that change in withholding to the debt.
   
   Cheering you on!!

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