401(k): When To Use It and When Not To

Ramsey Everyday Millionaires

Ramsey Network

Business, Careers, Investing

4.8 • 3.6K Ratings

🗓️ 15 July 2024

⏱️ 3 minutes

🔗️ Recording | iTunes | RSS

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Summary

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0:00.0	This episode is sponsored by SmartVester. Connect with an investing pro for free at Ramsey Solutions.
0:11.0	Com slash invest.
0:22.0	You're listening to Ramsey everyday millionaires where we talk investing, retirement, building wealth and outrageous generosity. Damien is with us in Sacramento.
0:24.0	Hi Damien, how are you?
0:26.0	Hello, doing good.
0:27.0	So my question is, I got about 30,000 in debt and my 401k has 46 in there.
0:35.0	No, and I think I know.
0:36.8	No, no, no, no, don't do it.
0:38.8	That's, just don't.
0:39.8	That's what I was thinking.
0:40.8	Yeah.
0:41.8	Because it's gonna cost too much.
0:42.4	It's gonna cost me more in taxes. I won't even be able to pay it all up.
0:46.0	Exactly. Exactly. You got a 10% penalty plus you got your tax rate. So it's like borrowing money at 30%
0:52.0	or 40% interest to pay off your debt that doesn't make sense at all
0:55.1	See that is an easy one. Yep. It was easy. Yep, and so what you've got to do is get your income up your out go down and that's not easy and it's working a lot down, and that's not easy, and it's working a lot of hours, and that's not easy,
1:05.8	and that's not easy, and then you'll clear the debt, and that is, then you'll look
1:10.8	back and go, that was easier than I thought it was going to be.
1:13.2	Matt's in Grand Rapids. Hey Matt, welcome to the Ramsey Show. Hello Dave.
1:18.6	Hey, what's up? Hey, I'm 61 years old, I'm going to retire in about four years. My wife and I have no debt other than our home. We have about 2.2 million dollars in 401k. We owe $300,000 on our home. Does it make sense? We would like the peace
1:40.6	of mind of being totally out of debt. I'd write a check and pay it off today.
1:44.6	You would? Yeah. Do you not have any money that's not in the 401k?
	...

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