Cashing out your 401(k) and using the proceeds to pay off your mortgage lets you borrow at a low rate and invest at a high rate and do so at no risk. So basically you're setting around $45,000 on fire by raiding your 401k. In your case, you have $53k in debt and $47k in pre-tax retirement savings. If you can really refocus your life and lower expenses and find a way to get debt free... by all means, fall back on the cc. Yes, the key question is: What kind of IRA? Do you really want to be out of a job with a net worth of NEGATIVE 21k, a wife, and two kids? What? 3. A friend of mine just told me she included it and they didn’t count against her, Ok got more clarity. Perhaps you could give them a tiny allowance at some point and teach them about the importance of NEVER USING CCs to buy things that you can’t pay off today, having an efund and THEN giving yourself whats left. Simple as that. Press J to jump to the feed. Why should we waste our time trying to convince you to make better financial decisions. If your wife isn't working and your kids are old enough, perhaps she can get a part time job. Easy, simple, and straightforward — that is what the 401k early withdrawal calculator offers. Don't cash your 401k out and don't live off CCs. Planning for your retirement is essential. Nevada. You can face a 401k early withdrawal penalty if you withdraw money before retirement age and various exceptions don't apply. You need to spend less and earn more. Get frugal right now. You can get out, but you need to start making sacrifices- I’m sorry to say. Sorry about that. So, if I can’t find another job right away, is it best to live off the credit cards? A place for your unemployment insurance questions. Here are some numbers to make it simpler. 3. You need to hustle to find a job and while you are looking get as many side gigs as possible. Don't do it. So best case, excluding the trivial amount of savings, you are about -$6k. Also have $15k on car note and $16k in student loan debt. Most people receive a retirement benefit and advice when they join a large company, but even the most stable working conditions can change. So I cashed out my 401k already, before 59.5 years old. Unless you think you never want to retire. There a jobs every where, search the bed you can, apply with your state, do the best you can. Apply for unemployment if you do get fired. I don't know, but with $12k in credit card debt, clearly you're spending too much on something. I can confirm in CA it does not count against you. A recent study found that one in three 401(k) investors cashed out their retirement accounts before reaching retirement. Because right now... you are probably paying someone +/- $2,250 for absolutely nothing in return. If you withdraw money before age 59 1/2, you'll pay a 10% early withdrawal penalty. I had been there for 7 years and earned 2 promotions. If you've made it two months, you can hang on for another one or two while you find something else. Most states treat it as a "pension" if there is even $1 of employer money mixed into the total amount, and will offset your UI. Check your car insurance if you do this. Press question mark to learn the rest of the keyboard shortcuts. My husband took an exciting job in another state, and with two kids ensconced in high school, we didn’t feel it was the right time to uproot our whole family. If you have a Roth IRA, you can take out your initial investment penalty free, as in, you invest $5500 in 2017, and you need it in 2018, you are allowed to take out that 5500 but nothing that you earned with that initial investment. TODAY. If you get terminated from your job, you have the ability to cash out the money in your 401(k) even if you haven't reached 59 1/2 years of age. 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