Sharon Epperson, a retirement guru, echoes the same advice one would get from a good debt settlement attorney – avoid raiding your 401(k) to pay off credit card debt!
There are only a narrow amount of circumstances when one should ever consider this and should only do so once you have sat down with an attorney to discuss whether those circumstances apply to you. Otherwise, you are putting your financial future in jeopardy. Because guess what? You can’t take out a loan for retirement! Nor can you live on credit cards during your golden years. In most cases, the better approach is to keep your 401(k) intact and to speak to a trustworthy attorney to see if workout (aka debt settlement) is the best option for you. Chances are it will always be the better option because the balance reductions you will receive will save you large amounts of money today. This way you won’t have to live on social security in the future.