I am 35 and I'm planning to go through a career training program that will cost about $90k. The PF wiki has great information for what to do if you have EXTRA money and I was wondering if there is a similar order of operation for the opposite situation in which you NEED money.
In my situation, it is a trade school so regular education loans are not an option. The best options I have thought of are borrowing against my home equity, borrowing against my 401k, and taking money out of my Roth IRA account. To come up with the full amount I'll need multiple sources, so the two questions I have are:
1) Is there another option or another consideration that I have missed? 2) What is the best order of accounts to withdraw money from? The $90k will not be needed all at once; it will be spent over two and a half to three years so is there a best order to withdraw the money in?
-
Drain emergency fund down from 10k down to 3 or 4k?
-
Home Equity - about $60k through a HELOC at 5.4%. I could also get cash out refinance mortgage but my current mortgage is at 3.5% so I think refinancing would be more expensive than a HELOC.
-
Loan from 401k plan - about $16k that I could "borrow" from myself and "pay back" with 5.75% interest to myself
-
Roth IRA - about $24k without tax penalty. I am assuming that if I make a plan to use this money at any point, I should probably move it out of the stocks and into a money market fund now which has its own opportunity cost to factor in.
Thanks for your help and thoughts!
Submitted February 17, 2020 at 07:15PM by rndmbr https://ift.tt/2STnFUf
