Do THIS Instead of Borrowing From Your 401(K)

The Ramsey Show Highlights

Ramsey Network

Self-improvement, Education, Investing, Business

4.6 • 682 Ratings

🗓️ 27 September 2023

⏱️ 6 minutes

🔗️ Recording | iTunes | RSS

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Summary

Today's episode features Dave Ramsey & Ken Coleman. The Ramsey Show Highlights is a quick, daily dose of advice on life and money in under ten minutes. Hear from experts like Dave Ramsey, Ken Coleman, Rachel Cruze, Dr. John Delony, George Kamel & Jade Warshaw. Part of the Ramsey Network. Delivered to you seven days a week. Budget for free with EveryDollar: Click Here Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Brought to you by the Every Dollar app. Start budgeting for free today.
0:06.0	Marks in Nashville. Hey Mark, how are you?
0:08.2	I'm fantastic. How are you doing today? Better than I deserve. What's up?
0:12.3	Well, I'm calling in to ask if it's a good decision or a short-sighted decision to cash out what happened my 401k thus far that I was
0:24.1	contributing to before I started on the baby steps in order to pay off my student loans faster.
0:31.1	How much is in your 401K?
0:34.6	Not like a ton.
0:36.4	I have about 27 and a half, and I used an online calculator that said that if after penalties and everything, I'd get about 20, 19 or 20.
0:45.2	Yeah, you get hit a 10% penalty plus your tax rate, so it'll be somewhere between 30 and 40% of it goes to the government for taking it out early.
0:54.6	So it's kind of like saying, Dave, I want to borrow money at 35% interest to pay all my student loans.
1:02.0	Nope.
1:02.8	Nope.
1:04.0	Nope.
1:05.5	Not doing that one.
1:07.5	No, we don't cash out retirement early to pay debt because of that.
1:10.6	It's just the cost is too high. So on... No, we don't cash out retirement early to pay debt because of that.
1:13.1	It's just the cost is too high.
1:16.7	So how much student loan debt have you got?
1:19.5	I've got about $52,000 left.
1:20.5	Now, what do you make?
1:23.1	About $56,000 a year.
1:23.7	Good.
	...

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