I got laid off from my job few months ago and moved my 401K to my IRA account

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  • #86331 Reply
    USER

      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!!

      #86332 Reply
      Elizabeth

        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.

        #86333 Reply
        Joe

          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!

          Don’t miss: For the first time ever I will make over the Roth IRA limit

          #86334 Reply
          Dustin

            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.

            #86335 Reply
            Jenny

              Talk to the hospital to arrange for a payment plan.

              #86336 Reply
              Amanda

                Hospitals are happy to do interest free payment plans-I wouldn’t worry about that bill or change financial plans just for that.

                #86337 Reply
                Lax

                  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?

                  #86338 Reply
                  Ellen

                    Don’t take it out of your retirement account. Take it out of his!

                    #86339 Reply
                    Christina SY

                      Ask the hospital if they can arrange a payment plan for your surgery.

                      #86342 Reply
                      Lax

                        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.

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