Withdrawal former employer 401k to pay off CC?

[disneysteve]

I worry about one thing that is missing from your budget, though -- where is your current retirement savings?

Re-read the first post:

contributing 10% of my base pay with a match of 4% of my total salary.

[BuckyBadger]

Re-read the first post:

Gotcha. I thought that was his old 401k. I didn't read closely enough to see that he has one with his current employer.

My bad :-)

Starting a ROTH as soon as they can still wouldn't be a bad idea, though!

[disneysteve]

Starting a ROTH as soon as they can still wouldn't be a bad idea, though!

Agreed. Standard advice is to fund the 401k just enough to get the full match, then fund the Roth up to the max, then go back to the 401k.

[JoshuaHeckathorn]

I've already signed up for a 0% balance transfer cc to hopefully rid myself of the interest payments and by the time the promotional period ends, I should have the credit cards payed off. I'm also going to work on cutting my discretionary spending down and putting more of the at towards my ccs.

Keep in mind that while I think utilizing a 0% balance transfer is a smart idea in your situation, it can have a negative effect on your credit scores if you're not careful. You may not care if you're not planning to rely on your credit scores anytime soon, but it's still worth thinking about. I know that after I got married I relied on my FICO scores for a lot of different things.

Just pay close attention to what credit limit you're offered and how much credit card debt you're transferring. For example, if you're offered an $8,000 credit limit and you transfer $6,000 to the new card, your credit utilization on that card will be 75% and your overall credit utilization should increase as well. That's going to really hurt your FICO scores.

Ideally, you want to keep your CU ratio on any particular card (or overall) at 10% or less. Once you bump above 30% you can expect it to have a pretty significant negative effect on your scores.

[hohlernr]

First, I want to say thanks for all the advice! I am extremely impressed with the helpfulness of everyone on this site!

Agreed. Standard advice is to fund the 401k just enough to get the full match, then fund the Roth up to the max, then go back to the 401k.

My 401k is a Roth 401k. Should I continue funding this at my current rate, or should I put enough to get my full match and then start a roth IRA? Forgive me if this is a stupid idea/question, but I really don't know too much about 401ks and IRA. What is your advice?

[kv968]

Although the "cashing out the 401k" option has been taken care of, let me just comment on that aspect of it. First of all, you should make sure that you are actually fully vested in it and that all the money the company matched is actually yours. Most companies have a "waiting period" (usually around 5 years or so) until all the money they matched is actually yours. I'd check that out. After doing so, you might want to look into rolling that 401k into an IRA since you most likely will have better options and expenses with an IRA.

That would bring me to this:

My 401k is a Roth 401k. Should I continue funding this at my current rate, or should I put enough to get my full match and then start a roth IRA? Forgive me if this is a stupid idea/question, but I really don't know too much about 401ks and IRA. What is your advice?

What investment options do you have in the 401k and what are the expense ratios on them? If your choices are limited and the expenses high, you'd be better off just contributing to the match and going elsewhere for the Roth. List a few (or all if there aren't many) of your 401k options and we'd have a better idea on how to answer the question.

[hohlernr]

Here are my options:

READY MIX OPTIONS
Blended Fund Investments*
Asset Allocation
* BTC LIFEPATH 2050 J
Inception Date 12/18/2007 -2.99 2.05 N/A N/A -5.15 09/30/2011
BTC LIFEPATH 2045 J
Inception Date 12/18/2007 -2.40 2.03 -0.78 N/A 0.16 09/30/2011


MIX-YOUR-OWN OPTIONS
Stock Investments
Company Stock
* DOW STOCK
Inception Date 01/31/2001 -15.56 -7.28 -6.66 -0.09 -0.03 09/30/2011
* DOW ESOP STOCK FUND
Inception Date 05/22/2009 -15.71 N/A N/A N/A 12.93 09/30/2011
Large Cap Growth
FID GROWTH CO K
Inception Date 01/17/1983 4.49 6.96 4.22 6.19 12.23 09/30/2011
FID CONTRAFUND K
Inception Date 05/17/1967 1.08 3.66 2.33 6.85 11.95 09/30/2011
Large Cap Blend
US LARGE CAP BLEND
Inception Date 09/01/2006 -0.20 2.60 -0.64 N/A -0.28 09/30/2011
S&P 500 INDEX FUND
Inception Date 09/01/2006 1.15 1.35 -1.08 N/A -0.68 09/30/2011
Large Cap Value
VANG WINDSOR II ADM
Inception Date 05/14/2001 0.06 0.19 -2.38 3.63 2.28 09/30/2011
Mid-Cap Growth
TRP IS MID CP EQ GR
Inception Date 07/31/1996 1.57 7.71 4.53 8.82 10.01 09/30/2011
Mid-Cap Blend
VANG EXT MKT IDX INS
Inception Date 07/07/1997 -1.99 3.10 0.81 7.34 5.57 09/30/2011
FID LOW PRICED STK K
Inception Date 12/27/1989 1.49 6.88 2.19 9.35 13.49 09/30/2011
Mid-Cap Value
VANG SELECTED VALUE
Inception Date 02/15/1996 -1.29 5.20 0.10 6.88 6.61 09/30/2011
Small Cap Blend
SMALL CAP INDEX FUND
Inception Date 02/01/2001 -2.91 1.66 -2.07 3.27 -0.63 09/30/2011
NB GENESIS - INST CL
Inception Date 07/01/1999 6.14 1.73 4.61 10.04 10.48 09/30/2011
World
VANG GLOBAL EQ INV
Inception Date 08/14/1995 -7.31 0.02 -2.95 6.89 7.20 09/30/2011
Foreign
VANG DEV MKTS INST
Inception Date 05/08/2000 -10.11 -1.86 -3.50 4.95 0.82 09/30/2011
FID DIVERSIFD INTL K
Inception Date 12/27/1991 -10.82 -2.88 -3.54 6.31 7.83 09/30/2011
Diversfd Emerging Mkts
EMERGING MARKETS IDX
Inception Date 02/08/2010 -17.66 N/A N/A N/A 0.73 09/30/2011
Specialty
AM CENT REAL EST IS
Inception Date 06/16/1997 5.04 -3.87 -3.72 9.08 8.12 09/30/2011
PIM COM REAL RET I
Inception Date 06/28/2002 4.38 0.33 2.45 N/A 10.00 09/30/2011
Convertibles
VANG CONVERTIBLE SEC
Inception Date 06/17/1986 -3.35 7.79 3.77 6.81 7.95 09/30/2011
Bond Investments
Long Government
VANG LT TREASURY ADM
Inception Date 02/12/2001 16.99 12.91 10.56 8.48 8.53 09/30/2011
Intermed Government
PIM REAL RETURN INST
Inception Date 01/29/1997 7.65 9.77 7.47 7.45 7.70 09/30/2011
Intermediate-Term
PIM TOTAL RT INST
Inception Date 05/11/1987 0.96 9.83 7.81 6.59 8.26 09/30/2011
VANG TOT BD MK IS PL
Inception Date 02/05/2010 5.30 N/A N/A N/A 6.98 09/30/2011
High-Yield
TRP HIGH YIELD INST
Inception Date 05/31/2002 0.53 10.64 6.35 N/A 8.06 09/30/2011
Stable Value
INTEREST INCOME FUND
Inception Date 02/28/2001 3.70 4.10 4.54 4.68 4.76 09/30/2011
Short Term Investments

US TREASURY FUND
Inception Date 01/04/1993 0.04 0.22 1.63 1.91 3.29 09/30/2011

[hohlernr]

Right now most of my contributions is going into the BTC LIFEPATH 2045 J fund. The management fee is 0.15% and the expense ratio is 0.17%.