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Does anyone know if American Funds can be taken out to pay off student loans and recieve a tax credit?
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If you have money invested with American Funds, yes, you can take the money out. What sort of account is the money in? If a retirement account, then keep in mind just because you can, it doesn't necessarily mean that you should.Originally posted by stoney508 View Post
There is no tax credit for paying off student loans. There is no tax credit for withdrawing money from an investment account. Can you give more information about the sort of tax credit you are curious about? -
I agree with what Petunia has already said. If you have invested money at American Funds, then you can definitely take it out to pay off the student loans. However, you cannot claim any tax credit for the same. Also, it is not mandatory to pay off the student loan in full immediately. If you have a federal student loan and if you are facing problems in paying off the loan, then you should immediately contact the lender and look out for affordable repayment options.Comment
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I have no problem with paying my loans the american funds were not set up as a retirement fund I already have a 401(k) through work to get my company match I have a Roth IRA also. I have not seen much growth in it since I have had it since I was around 12 with 800 in it and only have 1000 or close to it now (im 26 now). I dont plan on adding to this either at this time and just wanted to know what the guy was talking about at my back I think he was considering me using the money to pay off a student loan and getting the tax credit on the interest paid then.
I am trying to reduce the amount I pay each month but dont want to extend the amount of time I will be paying im on the standard repayment path which I think is 10yr. If I take the money out and pay towards my SL I could then actually free up 57 dollars a month to help build up my EF for when I move out on my own. Currently living with parents to pay as much of my SL as possible.Comment
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If that account really started with $800 and it really only has $1000 now then your 14 year return has been 2%. Whatever you decide to do with the money I don't think it should include leaving it there.Comment
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well I have made the decision to cash out these american funds does anyone know what about the taxes taken out would be so I know how much to expect to save in order to pay them?Comment
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well I actually found out that the account originally only had about 400 maybe 500 to start with and has grown to about 1200 now in probably less than 12 years so its making me think about cashing this out right now, I still plan on paying my SL with this but maybe I should hold off for a while at least until I get a little more grounded with other changes that are accuring in the next 6 months.
What do you think?Comment
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