Your Life

Your Life

Major life milestones often have a major tax impact. Changes in your marital status, having a baby or adopting a child can have significant impact on your taxes. This is the place to ask questions about dependents, real estate, and other various scenarios that play a significant role in what taxes you pay.

Reply
Highlighted
Trusted Pioneer
Posts: 6
Registered: ‎01-19-2016

Using 401k loan to pay off credit cards

If I take out a 35k 401k loan to pay off credit card debt and switch jobs could I choose to early withdraw the 401k loan amount?  I know I would get slapped with a 10% penalty, federal and state taxes but i'm in a low tax bracket and willing to take a hit on my retirement.  Note: I'm not allowed to early withdraw 35k from my 401k with my current employer.  I still would need to investigate how big of a tax burden I would face, but the interest rates on my credit cards is insane and I'm wondering if this plan is somewhat sane.

 

Thanks