Hi,
I have about 18k in credit card debt and am now unemployed. I have around 50k in my 401k. Since I'll be paying taxes on the 401k if I were to start using it at retirement age, what's the difference if I take the tax hit now and pay off expensive credit cards with their interest rates?

Thanks Timofohio

The hit is that not only do they take out 20% now,but the IRS will want their share also. Around 20% also. So, say goodbye to about half of that 50k.

TimofOhio, may I suggest talking to a Debt Settlement Company?

I am a financial Consultant and I work with people in debt having trouble paying their credit card debts, Medical bills, personal Loans, etc. Pretty much any type of Unsecured Debts. The company I am with is one of the select few that is compliant with each Attorney Generals regulations and laws and that can actually do debt settlement in all 50 states.

We are able to guarantee cutting your debt down to atleast 55cents on the dollar.. so for you 18,000 would be brought down to around 8,000 dollars in debt. We also are insured by the FDIC and are able to get you into lower monthly payments, there is no interest with our program or hidden fees.

I'd rather let me and my services speak for themselves rather than sit here and try to sell you on my company. If you'd like we can speak more about it in more detail since I cannot tell you how I can help out without knowing your exact situation.

what I can tell you though, is that I will not set you up with a program that will not be beneficial to you. We provide many different payment options based on your specific financial situation.

Also, just one more little fact, We actually help you file a hardship letter which will prevent the savings (ESCROW account) that we set you up with (In your name, not our company's.. you are in complete control of it) from being taxed at the end of the year so the full amount that you pay will be used towards your negotiations.

So please if you are interested in hearing more please let me know or contact me. I am available anytime any day, I try to do my job anywhere I can because I feel that I don help people with their situations and to do that it takes more than simply working 9-5 if you know what I mean.

Did you actually read the post or are you not paying attention to it. Quit advertising this crap.

I read his post and take it as you will, if I can help someone I'm not going to bite my tongue and watch how I give them the information they want or may need. I apologize that I typed the wrong username, I didn't scroll up enough.. we all make mistakes.

If you look into it Debt Settlement is a great solution for many people, not everyone of course, but if looked into may provide relief to some.

I did not once advertise my company or say contact me and we will get you started,

If he wants information he can contact me and I will speak with him, if he wants my help great, if not best of luck to him in however he decides to deal with it.

I apologize if I offended you with the post, but if you were a firefighter and you saw someones house on fire, wouldn't you offer to help?

You still didn't answer my question, your reply was to me, I didn't write the thread.

Hi Tim,

I agree that Debt Settlement may be a good route for you to pursue, but you should know that it is not necessary to hire or pay a company to do it for you. You can talk to your banks directly to settle your debts, save the fee, and probably do a lot better than 55%. I settled over $200,000 of my own debt instead of filing bankruptcy. I settled most of it for about 35%.

That would be only $6000 for you. So, is taking $8000K or so out of your 401K, paying the penalty, and using the rest to settle out the entire $18K in debt, worth the trade off for you.