I have a substantial amount of money in my retirement plan and pension. Is there any way to use that money to payoff my current credit card debt, student loans, or car loans without being hit with the huge early withdrawal penalty?
Can I use the money in my retirement plan to payoff CC debt/student loans without penalty?
May 4, 2010 By 5 Comments
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Bad idea. Some plans will permit you to BORROW against your retirement account. If you take money out, you would owe an immediate 10% early withdrawal penalty and taxation on the full amount removed.
no
You can not borrow from pension funds.
You can borrow from a 401K if you can prove extreme hardship.
You can use IRA money for a first time home purchase or for college expeses without a penalty.
Can you prove hardship?
Then set up a meeting with your HR person.
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No you cannot borrow money to pay off credit card bills. A loan can be used for a home purchase or extreme hardship.
You will end up paying about 50% in penalties and taxes.
No!