Use 401K to Pay Off Debt?
Doug and Melissa are in their early fifties and still have a ton of debt. They’ve managed to save a decent amount of money for retirement. Melissa wants to keep their savings, but Doug just wants to get out of debt. He says he’ll work into his seventies anyway, so they won’t need a lot of money saved for retirement. They asked me what I thought they should do.
God wants us to plan and prepare for our future – so my advice would be for Doug and Melissa to leave that 401k alone!
They should start attacking their debt with their current income. Your 401k, or any other retirement savings, should only be used for retirement. You face many penalties if you withdraw it early – and it is risky to borrow from it.
And if you have more questions about your finances, ask us.