Cash Out To Pay Off
Kevin doesn't need to cash out his retirement savings to pay off his 150 grand in debt; he needs restraint!
QUESTION: Kevin has between $150,000 and $200,000 in debt, mostly credit cards. He has $350,000 in retirement savings. Should he use his retirement savings to pay off the debt?
ANSWER: Your family is in desperate need of restraint. You make $90,000 a year and still rack up $200,000 in debt! You’re acting like you’re in Congress or something. Don’t cash out your retirement because fees and taxes will take your head off. You have to cut your lifestyle so dramatically that people at your house are freaking out.
Get on a written game plan and list these debts smallest to largest, and make it your mission to clean up this debt with the debt snowball. If you’re not making substantial traction eight or nine months from now, you may have to sell the house. If you cash out retirement and don’t change the behavior, then you’ll end up right back in the same mess.