Use of 401k funds to pay down debt
Good Morning,
Is it ever a good idea to use your 401k funds to pay off debt. It is my husbands 401 and he is 71 years old.
Thank you for your advice and we love listening to you on WGN with John Williams
Terry Says
Could I ask you first to get some free, but completely trusted, counseling by the National Foundation for Credit Counseling at 800-388-1117. Taht will connect you to the nearest local office. You can go in — or talk on the phone. A lot depends on what kind of debt, how much it will impact your future income. If you have high-interest credit card debt, it might make sense.
But of course, you’ll have to pay ordinary income on any withdrawals. And so it depends on your level of income, because a big withdrawal could result in an increase in your Medicare Part B and D premiums. Please take that into consideration.
Click on this link to see what income levels trigger higher Medicare premiums.
