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I am contemplating taking between 5K-10k out of an

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I am contemplating taking...

I am contemplating taking between 5K-10k out of an investment to pay off a couple credit cards and then putting more in my 401K. I am 61 and can deduct federal tax prior to taking it out. Is this a good idea?

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

Not that I can think of.

Submitted: 3 months ago.Category: Tax
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1/3/2018
Tax Professional: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 3 months ago
Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Tax
Satisfied Customers: 2,170
Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA
Verified

Welcome to JustAnswer!

My name is***** will assist you tonight.

Given the scenario you explained above and the high rate of credit card debt you may very well benefit in the long run by withdrawing funds from your investment account to pay off credit card debt.

___

If the credit card companies are charging you more than 8% annually and you are over the age of 59 1/2, in general, I would agree with your strategy.

___

This strategy works best when combined with a new budget plan which doesn't include the use of your credit cards in the future.

__

You are able to have taxes withheld from your withdraw if the investments are in a 401K or IRA.

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Tax Professional: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 3 months ago

If you have any additional questions or would like me to expand on my answer above please let me know!

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Tax Professional: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 3 months ago

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