hey guys, i'd like some opinions from you, since there seems to be a good number of intelligent people here.

given the current financial situation i have been thinking about withdrawing the money i have in my retirement account from my previous job and use it to pay off some of my debt (mainly credit cards). yes, i know i will be taxed on the money i take out, since this money was put into the account pre-tax. my concern is that if i leave it in the retirement account, there is what feels like a good chance i will completely lose it. i have moved the money from stocks to more stable funds, but i am still worried about the company my account is with collapsing and/or the market crashing and my money disappearing. and i'd rather lose a little bit of money to paying taxes for withdrawing my money than lose it all if there is a crash/collapse/failure.

i would like your thoughts on whether or not you think it would be a good idea.

thanks in advance for your help.

who was your previous employer?

what is the interest rate of your credit cards?

what type of funds did you move your money to?

Note:

I am not a certified CFA, I just play one on n00bfest.com.

employer??? a construction product supplier. i was a sales engineer.

one credit card is 7.99% and i'm not sure what the other is, but it's probably like 18% or something gay like that.

i have to check what the funds are that i moved the money to. i did it a few months ago, so i don't exactly remember.

Our entire monetary system exists as debt.

You will not get out of it no matter what you do.

What type of retirement account is your money in right now?

Do you know if it qualifies for direct rollover?

Someone obviously didn't see Fight Club.

yes i can roll it over into another account.

kitten, i understand our monetary system, i'm just worried about potentially losing all the money in my retirement account due to a crash/failure, so i'd rather use it to pay off a portion of my debt before it disappears.

You need to read the fine print on your retirement account. Besides tax, you may get hit with penalties for early withdrawal too, that could rack up to an almost 50% loss.

We're in this financial state right now because a lot of people are doing what you're thinking about doing and it's killing the global economy. It's the exact same thing that happened in the 20's, people panic, pull out money, markets crash. It's a risky decision either way you go man.

yes i do need to read the fine print to check for penalties.

in my opinion, people pull out their money because the market is falling already, but yes, it does make the situation much worse when the pull out their money. if i didn't feel there was a chance that the investment firm would go under or the market would fail i wouldn't take my money out. if i am confident my money will be secure, i would be comfortable leaving it there even if it's not gaining any interest.

Roll it over into your new employers retirement plan. The taxes that you'll get hit with start at 20%. Not to mention the hidden fees that coach mentioned. You'll LOSE a lot of money if you withdraw the money early. Not only will you lose with the taxes and possible hidden fees but also the future earning potential that that 20% or more would have generated during the years leading up to your retirement. Trust me the biggest hit would be the future earning potential.

i understand the taxes and losing out on potential interest; the penalties i didn't think about. my point is, if i roll it over or don't pull it out of the current account and shit goes bad, the money is GONE. plus, i'm paying interest on my credit cards, and with the way the market is my retirement account isn't gaining any interest. so technically i'm losing money anyway. if i pull the money out, yes i'll get taxed, maybe i'll pay a penalty, but i won't be paying the interest on my debt, so i won't be continually losing money.