Long story short I started a Roth IRA retirement account when I turned 18. It takes the form of a stock portfolio and has performed incredibly well (I got lucky with Netflix) and is now worth about $17,000. Fast forward six years to when I graduated college and needed to take out a credit card to pay my bills for awhile while moving and looking for jobs. I managed to rack up $3000 in credit card debt before being financially stable. However I still live paycheck to paycheck and can’t afford to pay anything more than my minimum on the credit cards. In addition, I often am forced to use my credit card to compensate for the credit card payments I have made. It has become a bit of a vicious cycle that I’m having trouble getting out of, and it’s ruining my credit.
I have never considered withdrawing from the Roth IRA because I know there is a penalty involved. However upon further research I believe the penalty is only 10%. I’m now thinking that I should withdraw the $3000 from my IRA to completely pay off my credit card debt and avoid any additional interest on my credit cards. I feel like a 10% penalty ($300) is significantly less than what I will eventually pay in interest on the credit card and I’ll end up on top. I’m nervous to take the penalty though.
Any thoughts? Should I just pull the trigger or is there something I’m not considering? I intend to build that $3000 back up over time, but it need to be on my own terms, you know?
Submitted February 14, 2019 at 03:14PM by DrLeisure http://bit.ly/2DHlYS6
