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bkb1956, Finance Enthusiast
Category: Finance
Satisfied Customers: 3792
Experience:  IRS Enrolled Agent, 18+ years of experience in tax preparation with associated finance experience.
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My family and I are struggling with some bills and expenses

Customer Question

My family and I are struggling with some bills and expenses and paying for private school tuition, some credit cards, and additional taxes. We are both going through a little bit of downturn in our jobs. I have a 401k with over $500k in it and have considered
taking money out of it, possibly $100k to pay off some of these bills. I know it is doable and understand it is not the best idea but we really need to pay off ours car loans, school tuition, credit cards some other pestering bills. Some have told me good
things about doing this and some folks have told me do it. I was hoping to get some advice on this whether it is good or bad. I know there are penalties involved and you get taxed on the money but paying off these bills would be a huge burden off our backs.
Should I do this? These extra bills are leaving us with nothing at the end of the month. We both make a good living our we are slowing digging into our savings to cover. Our child has special needs and the therapies have been killing us. He has counselors
and therapists that are costing $500 per week, plus private nursery school and camp which is about $1500 per month. Then we have two car loans equaling about $1000 per month.
Submitted: 2 years ago.
Category: Finance
Expert:  PDtax replied 2 years ago.
Hi from Just Answer. I'm PDtax, and can assist.
Expert:  PDtax replied 2 years ago.
I can assist, but there is additional information needed, and the price offered is low for the value of the answer you seek. I will post an Offer of Additional Service for a price increase. Accept, and I can work with you right now.
Expert:  PDtax replied 2 years ago.
Hi again. PDtax here.
I have been called away for meetings out of the office. Since you did not accept my Offer, I will opt out, and other experts can review your request.
If you do choose to accept my offer, I can work with you Saturday morning late. Please have access to last year's tax return and a summary of your current monthly income and expenses.
Expert:  bkb1956 replied 2 years ago.
Different expert here - my name is ***** ***** I will be happy to assist you today.
Based on the information contained in your question, my answer will be based not only from a financial perspective but also from the perspective of giving you peace of mind and less day-to-day worries regarding paying your bills.
My best advice would be to withdraw the money from your 401K to pay off some of your bills even though there will be taxes and penalties involved. Because you are both working, paying off these "extra" bills will reduce your burden to pay bills and probably give you the opportunity to have extra money at the end of the month.
Alternatively, if your 401K plan provides, you can borrow a certain amount of funds from your 401K and repayment can be made from your paychecks, and there will be no taxes or penalties due unless you default on the repayment.
Please let me know if I can assist you further.
Thank you and best regards,
Expert:  bkb1956 replied 2 years ago.
Just following up with you to see if you have any other questions. If so, please come back to me here at your convenience, and I will assist you.
If not, please take a moment to rate my answer since that is the only way I receive credit for my answer and alerts Just Answer to compensate me.
Best regards,