Roth IRA and CC debt

[NIkkiB]

Hi,

I am 28 years old, just graduated law school and have 250k in law school debt. Right now I am in deferment. I have 4k in my ROTH and i owe 9K in credit card debt. I was wondering what everyone thought about me taking out my Roth and paying credit card debt and paying the rest off with my 5k saving in my saving account. I really want to eliminate this credit card debt so I can focus on saving a little (starting my 401K at my employers) and paying off educational debts. Do you think taking the 4k out of my Roth is a good idea?

[disneysteve]

No. Cashing out your retirement is a lousy idea and in the grand scheme of things, the 4K will barely make a dent in nearly 260K of debt. I'm curious how much you're earning now that you are out of school. I hope it's a lot to support the payments on $250,000 of student loans.

[jpg7n16]

Hi,

I am 28 years old, just graduated law school and have 250k in law school debt. Right now I am in deferment. I have 4k in my ROTH and i owe 9K in credit card debt. I was wondering what everyone thought about me taking out my Roth and paying credit card debt and paying the rest off with my 5k saving in my saving account. I really want to eliminate this credit card debt so I can focus on saving a little (starting my 401K at my employers) and paying off educational debts. Do you think taking the 4k out of my Roth is a good idea?

So your plan to increase your retirement savings, is to cash out your retirement savings??


As DS pointed out, that is a bad decision.

Pay off the CC from savings and cashflow. If you can't do that in just a few months, transfer the balance to a 0% CC.


Far far more important is figuring out how to manage your cashflow going forward, including what to do about the debt, why you built up CC debt in the first place, and what your budget will look like going forward.

If you really want some help, we can help evaluate your overall budget. What does your budget look like? Income? Expenses?