Cashing in an IRA?

[Goldeneagle]

if you only have 8 years left on the house i imagine you have some equity in it. you could pull some cash out with home equity or similar to pay everything else.

this would prob reduce your monthly outflow big time, and you keep your ira in tact knowing you can pay it off at any time

ex: 50k in cc debt has min payment of $1250/m at average of 12% interest
50k heloc has about a $200/m min payment at about 4% interest

A home equity loan is part of the problem.

[txdukklr]

In general terms, the advice given above is normally the correct answer. However, it's not always the case.

Do you have any debt outside of your mortgage? If so, you need to consider the interest rate on that debt and what you are losing by NOT paying it off with the proceeds from your IRA. You're going to pay ordinary income tax on the proceeds when you money out of your IRA either way, it's just a question of the 10% penalty. If you're paying 20% interest on a credit card balance, I would say you're better off paying off the credit card balance.

What is your mortgage rate, and have you looked at refinancing? You could probably substantially lower your payments by refinancing to a 10-15 year fixed rate loan, and that would help. Depending on your credit, you could probably borrow money at 3.5%. Debt can be useful!

Like Bily Lovec mentioned above, you might look into taking a loan against your 401k. You pay yourself the interest, which is nice, but you're also taking money out of the market.

Hope this helps.

at 55 it would be the last option

sounds like your close to last option, my thoughts is that if it improves your quality of life then don't worry about the loss. Investments lose money but that can be regained. You might spend the next five years in a stronger financial position, re-invest, regain on the 401k match and so on.

you cannot regain quality of life or lost time. I say sell it, take the hickey, pay down highest interest debt, max out 401k with higher disposable income.

Also your going to pay off house in 8 AND have home equity? so you'll pay the HE and the Home off in 8? Might want consolidate that back into a jumbo conventional loan, rates are still fairly low.

[Bill]

If you have a whole life type insurance policy you may be able to borrow against the cash value in it, and the interest charged goes back into your policy. I'm not giving investment advise, just a option. Talk to a professional.

[Grayson]

Not enough info to give you sound financial advise, but I should have an extra doe this year if that would help you out any. I'm not too far from you.

[Goldeneagle]

Not enough info to give you sound financial advise, but I should have an extra doe this year if that would help you out any. I'm not too far from you.

Thanks for the input everyone. I have a couple of things in work that will help if they pan out.

Grayson, we're not going to starve, but I'll take that doe if you want.

[Storm]

I cashed in my 401 about 14 years ago and paid on it in taxes for 5 years its not worth it and this is just what I think . If I had to do over again I would leave it alone but a loan against it that you can pay back in small payments over a long period of time should help you out.

[marceco]

Go to The Institution that has your IRA , there might be options there ; they really seem to scramble with new options when they realise they might be losing money . Put EVERYTHING down on paper and study it for a few days ; you might see another option you have never considered . Good Luck to you and I hope things work out . . .

[JeffJ]

Go to The Institution that has your IRA , there might be options there ; they really seem to scramble with new options when they realise they might be losing money . Put EVERYTHING down on paper and study it for a few days ; you might see another option you have never considered . Good Luck to you and I hope things work out . . .

So you are saying go to whom ever custodians the IRA and try to negotiate with them?

[marceco]

So you are saying go to whom ever custodians the IRA and try to negotiate with them?

Yes , I don't know what bank it is but if it is a " Good Bank " they will find a way to keep a customer . I understand many " Big Box Banks " won't , but there are lots of Small Town Banks and Credit unions around that still provide Good Service . . .

[Shane]

Yes , I don't know what bank it is but if it is a " Good Bank " they will find a way to keep a customer . I understand many " Big Box Banks " won't , but there are lots of Small Town Banks and Credit unions around that still provide Good Service . . .

It doesn't matter who the IRA custodian is, they can't change the IRS tax rules related to IRAs.

[marceco]

It doesn't matter who the IRA custodian is, they can't change the IRS tax rules related to IRAs.

I understand that , but they may be able to refinance current home or vehicle loans . I guess I have just been blessed by " Small Town Banks " and Credit Unions . I have always seen them " go the extra mile " to help current customers remain customers . That is what I meant , not allow access to the IRA . . .

[stablebuck]

Consult the exceptions for being penalized for withdrawing early at irs.gov
Also if it's a Roth IRA you can take out your contributions at any time...just not the dividends. I believe one of the exceptions to being penalized is if you have medical bills that exceed 10% of your AGI.