So, I've got some balls rolling. And now I'm sitting and waiting and packing and waiting and reading and doing paperwork and waiting and eating cake and Oreos in between. Being unemployed is making me fat. I always assumed the opposite would be true. I was wrong. Though the Wii fit is sitting right there mocking me and all my free time....
Yesterday was my birthday. I'm 37. If you didn't already know that, now you do.
Now to the real point of this....any financial wizards out there should chime in right now and tell me if it's better to use credit cards or take some of my 401k out to pay for a move. And do so with the knowledge that I probably already have my mind made up and will more than likely do what I'm going to do anyway but I'm asking for input to feel like I'm being a bit responsible by "doing research." That's what this is. Research. Yeah.
4 comments:
If you're able to pay the credit cards back somewhat quickly, I'd use them. When you take money out of your 401K, they tax you out the ass. They tax you when you take it and then tax you again when you file your taxes, it's ridiculous! I guess it's just a matter of how much money you'll pay in interest compared to taxes. If you can figure that out, then you'll know your best option. Then again, I'm not a financial wizard. I'm just someone who's taken money out of a 401K and used credit cards.
I'm on the credit card side. They're both scary sometimes, but credit cards are made for this sort of thing while 401ks are not.
To pull out of 401k you are looking at 10% penalty off the top plus about 25-30% in taxes, though you will probably get some of that back at the end of the year. One option depending on how your 401k is set up is to take a loan from it. You won't have the penalty or the taxes, but you have to pay it back with after tax money. Though usually once you are no longer affiliated with the company they won't let you take loans any more.
If you can't got the 401k loan route then credit cards would probably be best. Put it all on one card and then once you get settled get a new card and transfer the balance. You'll get the intro rate, which should be low to start. Then pay it off as quick as possible.
Credit card.
And I absolutely love that comic. Ha!
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