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August 1, 2023 at 5:31 pm #86331USER
I recently found that my husband have a huge debt on his credit cards and with an upcoming surgery, I’m quite stressed about my money situation.
My question: Can I take out money from my IRA account, will it incur any penalties?
I’m planning to call fidelity and check with them about my options but thought to check here if anyone can give me any information or suggestions.
TIA!!August 1, 2023 at 5:31 pm #86332Elizabeth
Please do not withdraw from your retirement accounts to pay credit card debt.
Find another way to save money, otherwise you will be hit with penalties and taxes.August 1, 2023 at 5:32 pm #86333Joe
Rule is don’t withdraw BUT if you do not want any penalties for doing it, it have to be from a ROTH IRA or 457 plan and the money has to have been invested for 5 or more years.
Otherwise exhaust all other options so you don’t get penalized!August 1, 2023 at 5:33 pm #86334Dustin
You can perform a conversion from traditional to Roth. But you’ll be subject to ordinary income tax and perhaps the pro rata rule.
Probably want to check with a tax consultant.
Personally, I think you need to understand everything and make an informed decision or else you’re raiding your retirement and it’ll happen again.August 1, 2023 at 5:33 pm #86335Jenny
Talk to the hospital to arrange for a payment plan.August 1, 2023 at 5:33 pm #86336Amanda
Hospitals are happy to do interest free payment plans-I wouldn’t worry about that bill or change financial plans just for that.August 1, 2023 at 5:34 pm #86337Lax
Well, you can withdraw with penalty and tax, but do you want to?
You should instead go deep into the credit card statements and see what is going on and look at your expenses and try to cut down and see if you can sell some of the stuff you don’t need including extra car.
Medical bills take time to get triaged by the health insurers and you can wait until all the bills are due.
Explore these too: Would you contribute to your HSA or Roth IRA first?August 1, 2023 at 5:35 pm #86338Ellen
Don’t take it out of your retirement account. Take it out of his!August 1, 2023 at 5:35 pm #86339Christina SY
Ask the hospital if they can arrange a payment plan for your surgery.August 1, 2023 at 6:01 pm #86342Lax
Hospitals in my area will make payment arrangements and/or reduce the amount you owe based on your income. Sometimes, they write off the entire balance. Even if you have insurance. You may not be able to apply until after you are discharged, but it’s worth checking into.
Sorry you were laid off. It has happened to me before and it is so stressful.
Also make sure you apply for unemployment if you are in the US.