I've got a big chunk of debt spouse and I are working on. While we've made good progress (10K in 5 months), we still have a ways to go.
I have made enough contributions to my Roth IRA to be able to withdraw the amount I need to pay off my car without penalty. My understanding is that withdrawals of money you contributed are not penalized, but withdrawals of any growth is. The amount would be about $3400 to pay off the car. The car loan itself is only 1% interest, and the monthly payment is only $144 because I put more than half the value down when I bought the car.
My feeling is that psychologically, I need a "win" - to pay something off. I could then allocate the money previously going toward the car toward high interest debt. Sort of - I just did a balance transfer for 0% for 12 months, 3% transfer fee for the highest balance and interest rate debt (consumer credit card) that I'm trying to pay off. That's what I would apply the previous car payment money to, and given my budget the balance transfer should be paid off by January (or sooner if I get a promotion and spouse gets a better job, which he has a strong prospect of in the fall. I also took a part time hourly work opportunity in my field, on top of my full time salaried job, so that should help too).
My concern is the opportunity cost of taking the money out of the Roth when I won't be able to contribute much to it until this debt is gone (hopefully within the next 18 months everything will be paid off). I feel like there are other downsides I am not quantifying/assessing. I just really want to pay something off NOW, it's been a few months since the last item was paid off.
So any thoughts would be appreciated, things I'm not considering. Maybe I just need to be talked out of my psychological need for a win. I really want to get more things paid off NOW though.