Bore™ Financial Advice - Diversify your bonds

[Brehvolution]

My 401k has been pretty stagnant for the past year. I have some credit card debt I'd like to pay off. Is it worth cashing out a little of my 401k to pay it off?
With rumors of possible recession and most likely stock market fall if a Dem gets elected, wouldn't now be a good time to do this while my 401k is still worth something? We are talking less than 1/6th my total 401k.

[kingv]

Generally people will tell you not to do that. But i think some of that is it’s a bad ha it to treat your 401k like a piggy bank.

The financial impact is more about whether it is a Roth or a normal 401k.

If it’s a Roth, you should be able to take the money out tax free.

If it’s a normal 401k, you will get hit fairly hard for taking money out.

1) you will pay a 10% penalty on the money you take out
2) it will also be taxed as normal income

Depending on your tax bracket, this could easily be 30+% of what you take out going straight to Uncle Sam.

[EightBitNate]

I want to touch my 401k so badly. I’m looking at houses right now and it would be nice to have more money to work with.

[Skullfuckers Anonymous]

NAFA

For the credit card debt, see if your 401k provider allows you to take a loan from your 401k. It’s a much better idea than taking money directly from your 401k since you avoid fees/taxes on it and your 401k balance will not be reduced. Only catch is that if you leave your job you need to pay back the loan immediately otherwise you’ll pay taxes/fees on the remaining balance.

Alternatively if you qualify you could get a credit card that charges 0% interest for a year or so and transfer your other balances to it and just pay it off before the 0% interest period ends.

[Brehvolution]

I know there is a hefty penalty to take the money out. I was just looking for some advice. Thank you for the replies.

[Cryo]

Can I hijack this to ask what I should do with money rotting in my shitty savings account if the coming recession is true

[shosta]

buy while it's low

[Nintex]

Can I hijack this to ask what I should do with money rotting in my shitty savings account if the coming recession is true

Short the pound 

[porkbun]

Can I hijack this to ask what I should do with money rotting in my shitty savings account if the coming recession is true

Throw it into the money market of a basic brokerage account.  You're at least making actual percentage points of interest versus the 0.01% you're getting on bank accounts.  Beyond that look into long term high yield mutual funds.  Fidelity and Vanguard have the rep (deservedly so) of safe but not spectacular returns.  4-8% doesn't sound like much on paper, but in the long run it's a great way to go.

 

[naff]

we have a similar scheme to 401k but they also let you use it with incentive if you're a first home buyer. been feeling i need to get on dis shit. but also, maybe i should just move to australia, earn the big bucks and keep my retirement fund for when i actually retire?