Is is wise for me to use my mutual Roth Ira to help me get out of debt. I’m 56 yrs old and need to pay off some credit cards rather than go to debt settlement or consolidation. Is this wise?
Step #1 to financial health is to eliminate all debt!!! You should always start off with any savings, if savings are exhausted and you cannot afford monthly payments to eliminate debt then you should use your Roth, contributions are always accessible regardless of age without penalty, but be careful because interest is not tax free until 591/2. Once your debts are eliminated you will have freed up cash flow to begin contributing again to your Roth.
Note, if your investments are yielding less than the interest expense of your debt than you are moving backward, so pay them off and start moving forward.
Don’t look back!!
For more information visit my website at www.vanbureninsurance.org.
I
Depends on what you are expecting for your future. No matter what, debt settlement is a bad idea, because it will end up costing you far more in the long run than just paying it off now. You should be able to withdraw your money from the IRA tax free I believe, since you’re over 55, but are you going to have any money left to live on if you drop your retirement on bills?
References :
Step #1 to financial health is to eliminate all debt!!! You should always start off with any savings, if savings are exhausted and you cannot afford monthly payments to eliminate debt then you should use your Roth, contributions are always accessible regardless of age without penalty, but be careful because interest is not tax free until 591/2. Once your debts are eliminated you will have freed up cash flow to begin contributing again to your Roth.
Note, if your investments are yielding less than the interest expense of your debt than you are moving backward, so pay them off and start moving forward.
Don’t look back!!
For more information visit my website at http://www.vanbureninsurance.org.
I
References :
ABC’s of getting out of debt; irs.gov