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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: mbjerry on October 26, 2017, 12:20:16 PM

Title: Withdraw Roth contributions to pay off a debt?
Post by: mbjerry on October 26, 2017, 12:20:16 PM
Is it ever a good idea to withdraw Roth contributions to pay off a debt? I am 34, my salary is $130k, have 150k in my 401k. I recently jumped on the MMM train but have been following Dave Ramsey for a year or so now and paid off a considerable amount of debt. I know Dave says this is a no-no but the MMM stance? Pros and Cons?

My 3 remaining debts are my house ($150k) and two cars ($25k each). I can withdraw $25k from Roth contributions and pay off 1 vehicle.
Title: Re: Withdraw Roth contributions to pay off a debt?
Post by: talltexan on October 26, 2017, 12:27:46 PM
What's your savings rate out of that nice $130,000 salary? If you called Dave up, he'd probably challenge you to pay off the cars in 9 months (while contributing zero towards retirement accounts and leaving the Roth money where it is)
Title: Re: Withdraw Roth contributions to pay off a debt?
Post by: JLee on October 26, 2017, 12:34:07 PM
If you're making $130k and live somewhere where you only owe $150k on a house, you should be able to knock everything out without compromising your retirement accounts.

Two $25k car loans? Why haven't you sold them (or at least one)?
Title: Re: Withdraw Roth contributions to pay off a debt?
Post by: mbjerry on October 26, 2017, 01:21:12 PM
Sorry for posting this topic twice. I didn't think the first one went through. Was having internet problems. Please see my other post for response. Thanks!

Moderator please delete this thread.