| Should I pay an annuity loan w/401K money? |
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Jill
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Location: Missouri
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| Should I pay an annuity loan w/401K money? |
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I'm trying to get debt free and I was wondering if it would be wise to move money from my 401K to pay for a loan on my annuity?(which is tax deferred) It would only cover about half of the loan amount. But I was thinking that it would be better to let that money grow tax deferred in the annuity rather than the 401K.
And would I get hit with taxes by doing this?
"If you can count your money, you don't have a billion dollars." - J. Paul Getty (1892 - 1976)
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Mon Feb 23, 2004 9:19 pm |
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Andrew
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Jill,
Yeah, I think you would get hit with taxes on any amount you withdrew for this purpose, plus the early withdrawal penalty. I'm not a professional financial advisor, but this doesn't seem like it would be worth it to me. I'm sure you realize that your money will grow tax tax-deferred in both your 401k and annuity. It is usually not a good idea to use 401k money early, unless you have a really pressing need (and can also avoid the 10% penalty). This may be of some interest...
http://www.money-talk.org/401k/401k-early-withdrawals.shtml
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Tue Feb 24, 2004 7:10 pm |
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Jill
Moderator
Cash: $ 0.80
Posts: 26
Joined: 23 Feb 2004
Location: Missouri
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| 401k advice |
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I was afraid of that with the taxes.
I wouldn't be taking out all of the money from my 401K just the part that I'm 100% vested in. (my employers amount would stay in.)
I guess I'll just have to start paying the loan a little at a time.
Thanks!
"If you can count your money, you don't have a billion dollars." - J. Paul Getty (1892 - 1976)
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Tue Feb 24, 2004 9:50 pm |
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