Penalty for liquidating ira account
If you repeat the cycle the next time there won’t be a retirement account to tap to bail you out. You might take a hit on the dollar value, but clean out your house and sell all of your unnecessary items in order to pay off debt.Fix the spending problem now, earn more income, or even better do both to truly fix your financial situation. Save your retirement accounts as the very last thing you look to touch.
There are some exceptions to the early withdrawal rules like paying medical insurance premiums during a long period of unemployment.As tempting as it might be to use your retirement savings to pay off debt, it can be extremely expensive to do so.You need to truly be in a desperate situation in order to justify all of the expenses that come with tapping your retirement accounts early.Another option is to use the 72T rules to escape the penalty burden.The following examples assume you don’t qualify for any of the random exemptions.
If you had $10,000 in debt you were trying to pay off you would need to come up with some significant cash in order to do so.