So all I ever hear is how you should NOT withdraw from 401K.

but, my DH and I are 25 and 24 so were are young yet and have time to rebuild our 401K before retirement, as most are just getting out of college and starting on it.

So we have 14,243.38 in 401K

We need 3,011 to get caught up on bills so creditors (mainly for medical) will stop calling.
We need 5600 (total) to get ahead one month.

So my question is would you withdraw from 401K to get caught up, get ahead, or both?

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We have. I don't think it is the best idea, but we did do it. However, we also paid off everything with it..and then started making small payments back to it to catch back up.

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Shaking in my boots (well, if I was wearing them in the middle of summer!), but glad to be back!

We did this once and NEVER AGAIN let me tell you. We pulled some money out to pay for one CC bill and guess what? three months later we maxed it again. Poor judgement I know. We are paying back our retirement account right now.


In a lot of books I've read though about finances its says you can borrow from your 401K to get caught up. I don't see why not just don't make the same mistake we did.

I would actually talk with a banker and see how much penalty u will have to pay. SInce u are young it might not be as bad but if you are this young and making bad money choices, as in Bluesky's case, you will only be digging yourself in deeper.
I would say no. You can always make arreangements to pay medical bills.

allgirls

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allgirls, mom to 3 girls

It's Girl Scout Cookie Time

I did it and I won't do it again..

It sounds like a great idea...it's your money, you can pay it back with payroll deductions so you don't see the money.. but the thing is, most companies/plans if you leave the company, you owe that money immediately. Also, you are paying back the loan with money that is already taxed..

If you do do it, make sure you know all then ins/outs of it, like the interest rate, payback schedule..like is it payroll deducted or do you actually have to pay it back yourself, etc.

Actually, in my plan right now, the loan interest rate is more than my cc. Maybe check on all your cc's to see if the interest rate is lower or maybe try calling them to see if they will lower.

I'm doing it but it's to catch up on my mortgage so I consider that an absolute necessity/emergency. My dh did it to loan his brother much needed money but his is from
a life insurance policy pd. for by his employer. Mine's through my pension plan.
You could always try paying the smallest one off first and work your way that way?!?!?
Good luck in your decision!

We did it once & we will not do it again. I am not saying that it is a bad idea. You can do it to go towards your house, medical bills, etc. I would check with your tax preparer & find out what the penalties and interest is. Have a lot of knowledge about the whole process before you do this.

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Mommy to Ariana 8/11/01 & Davis 4/11/05
I love my kiddos!

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I guess I didn't realize that the money had to be paid back. I thought that we would just "start over" .
I knew that they tax you on it and that a 10-20% penalty is added. But that seems worth it to stop the phone calls. I am just so tired of it all. My girls have all been worth it, but ugh!

We have made some bad money choices. We were doing so well before I got pregnant, then I had to quite work (per doctor's orders). Blew through savings. Started using cc's to pay bills (big mistake). Sold our house. bought a much cheaper house. NICU costs, Abbey's medical bills. Things just started to pile up and now we are drowning and I am looking for a way out.

We have called both hospitals. One has put us on a 100/month payment plan and the other won't . Abbey alone has 5 different doctors that we have to see twice a year(20 copay a piece that we pay on the spot).
Sometimes I feel like why us? But I must admit that they are well worth all the money and stress.
I am just so tired of all the money problems. Tired of getting so many "we want our money" phone calls. I know that they need their money, but we just don't have it.
ok, this has turnedinto a major pity party and I am done.
Thanks for reading if you still are.

I know that I have more research to do.

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Send the medical people a letter telling them that they are only to contact you via USPS and you will no longer to accepting phone calls. If they persist, report them to the FCC. Secondly send each company a check, even if it's for $5 with a letter stating that you are sending them payment for the bill and that is all you cn afford to send at this time. If they cash your check, they have accepted your paymnet plan. You can send yourself a copy of the letter thru the mail and just don't open it when it arrives back in your mail box. That way if you go to tcourt, the judge can open the sealed letter that states that if they cash the enclosed check they have accepted your payment plan.

We did that in our Twenties too.
I think it was a good Choice - We never owed the Company any money either ... Not sure how that Works ...

The Way we looked at it was - Why have money sitting there - We thought God forbid if something Happened to us we may never need that money Later on anyway ....

We Used it to Save us from the everyday misery we were Living - with NO money and Bill Collectors calling us all the Time Etc, etc,

That time really did Suck
And I think living like that was worse than not Having Much Left in retirement.

We learned from our money mistakes and Only Moved forward - Dh Could then Focus on his Career , I Could focus on our kids and House ....

We Moved up the Ladder Stress free and Now at 31 Dh has alot of money back in 401K


I say go for it - if you Learn like we did - and You are simply trying to free yourself ...