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Hi I am new here!!! And had a question of some experts....
I have $25,000 in a 401k plan from an old employer. I haven't touched it in a couple years and have left it there to continue to invest. The question I have it that I have this line of credit that I pay everything month. The balance on that line of credit is about $23,000. Here is the scenerio, I pay $517.00 a month to this line of credit that I have and it is about a 16.99% interest. It really irritates me every month when I pay it. It is the only real debt I have left to pay off other than my home and car. I would like to get it paid off, but only about $175.00 a month out of the $517 payment goes to prinicipal each month and that is with me paying more than the $517 (i actually pay about $550). I have always been told to NEVER withdrawal your 401k early and I do understand the impacts.... (I will get taxed 20% and I will have to pay the 10% withdrawal fee)... however, in this situation I am wondering if I should take the payout and pay down this line of credit? I do have a new 401k plan at my new employer and am socking some money into it every paycheck. I would be able to put even more into it when I get this line of credit paid down. By the way, I am 33, so I do have some more time to save... but, I am not wanting to work until I am ancient either.
I have $25,000 in a 401k plan from an old employer. I haven't touched it in a couple years and have left it there to continue to invest. The question I have it that I have this line of credit that I pay everything month. The balance on that line of credit is about $23,000. Here is the scenerio, I pay $517.00 a month to this line of credit that I have and it is about a 16.99% interest. It really irritates me every month when I pay it. It is the only real debt I have left to pay off other than my home and car. I would like to get it paid off, but only about $175.00 a month out of the $517 payment goes to prinicipal each month and that is with me paying more than the $517 (i actually pay about $550). I have always been told to NEVER withdrawal your 401k early and I do understand the impacts.... (I will get taxed 20% and I will have to pay the 10% withdrawal fee)... however, in this situation I am wondering if I should take the payout and pay down this line of credit? I do have a new 401k plan at my new employer and am socking some money into it every paycheck. I would be able to put even more into it when I get this line of credit paid down. By the way, I am 33, so I do have some more time to save... but, I am not wanting to work until I am ancient either.
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