Throwaway account because, reasons.
Quick look at my finances: I am 27 years old with a $70k/year income, annual growth at least 4% but probably more in the near future. I contribute monthly (with corporate matching) to my 401K and have $23,000 in there (fully vested.) I also contribute to HSA and personal savings. I have about $6500 in liquid savings.
I have approx $7k in credit card debt from right after college that I am slowly paying off. I balance transferred everything over to a new card and have 0% interest remaining until December. The plan has been to throw money at this debt and pay it off before the balance transfer promo period runs out; however its slow moving and the hundreds of dollars I spend doing this each month is money I feel I should be saving (I will need to replace my fully paid for car in the not so distant future and would like to be in a good position for that.)
I am SO READY to be done with this credit card debt, but cleaning out my liquid savings to that end would be shortsighted as home ownership is unpredictable (also see car situation above.) I am considering biting the bullet and making a withdrawal from my 401k to just get rid of the remaining balance.
Is that a bad idea? I am aware it would be taxed, but it feels worth it to be able to say I'm fully debt free (minus my home) and be able to save the nearly $600 per month I'm spending trying to pay this off. My 401k would be reduced to $16,000 but again, I'm only 27.
Thanks!!
Submitted April 19, 2017 at 05:43AM by wanna_be_debtfree_17 http://ift.tt/2oUoWgz
