Q&A: Should I Use My 401k to Pay Off Debt? - Episode 655
Investing in Real Estate with Clayton Morris | Investing for Beginners
Clayton Morris
4.1 • 1.1K Ratings
🗓️ 27 July 2020
⏱️ 13 minutes
🧾️ Download transcript
Summary
Right now, the CARES Act is allowing Americans expanded options for tapping into retirement funds. Given these options, should you tap into a 401k to pay off high interest credit card debt? On this Q&A Monday, I'm answering this question, and more!
On this episode of Investing in Real Estate, I'm answering three listener questions on topics like accessing retirement funds, making connections in real estate, and options for using equity to expand a real estate portfolio. Don't miss episode 655!
Transcript
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| 0:00.0 | Welcome into the real estate investor show where we answer your most pressing questions |
| 0:09.2 | about becoming a real estate investor. |
| 0:11.0 | Our goal is to make you a better real estate investor and |
| 0:14.6 | will answer your personal finance as well as real estate questions on the show. |
| 0:17.8 | So without further ado let's dive into today's questions and as always you can |
| 0:22.2 | leave us a voicemail and get your questions |
| 0:24.2 | answered right here on the show. Just go to Morris Invest.com slash Clayton. That's how you get your questions |
| 0:30.1 | answered. Very simple to do. We'll also have a link in the description below. |
| 0:34.4 | All right, without further ado, |
| 0:35.5 | here is our first question today from Matt. |
| 0:38.4 | Hey Clayton, my name is Matt. |
| 0:39.8 | I'm looking to utilize my 401k |
| 0:42.0 | to pay off some high interest credit card debt and right now we have the option of doing the |
| 0:47.0 | loan out of it or just doing a withdrawal. |
| 0:51.4 | Just looking for your advice on that because I kind of am leaning towards the withdrawal, but I'm worried about the tax penalties at the end of the year. |
| 0:59.0 | We would qualify for the cares, so we would minimize some of that penalty of taking it out early but I'm worried |
| 1:06.7 | about paying it back into a 401k that's volatile and underperforming. |
| 1:12.0 | Well thank you Matt and I think you just answered your own question right there, which is, you know, wanting to put your money back into a volatile stock market into a 401k. |
| 1:21.0 | Now, once again, I'm not a lawyer, I am not a CPA so seek your own advice on this but in my |
| 1:26.4 | humble opinion if this were my 401k I would absolutely be taking advantage of the CARES Act. |
| 1:34.0 | If this were my 401k, I would be withdrawing it. |
| 1:37.5 | For those of you that don't know, |
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