+9 votes
by (210 points)
Help me make a decision. So while having a discussion about debt, my husband remembered that he has two 401k accounts from over a decade ago that he’d forgotten about. I know we had conversations about them like 5 years ago but they haven’t been thought about since. One is on a hold and earning nothing at about $4000 and the other is about $7, 460 now. We have stopped contributing to his current 401k until our debt is payed off. We can roll over the money to his 401k (and pay taxes) or cash out (and pay taxes + IRS fee) and pay off some debt. We currently have His car: Original loan: $34, 000 Remaining: $11, 405 Interest rate: 6. 4% Monthly payment: $565 My car(it was an “oh crap we have our 4th baby due in 3 weeks and need a mini van” moment) : Remaining: $11, 650 Interest rate: 13. 9% Monthly payment: $238 My car would be the debt we tackled because the interest paid over time is going to be significant. Bad idea?  
Help me make a decision.

5 Answers

0 votes
by (970 points)
Idk if you can cash out-unless you are a certain age.  
0 votes
by (150 points)
I don’t know if cashing them out would be worth it after taxes and penalties. BUT. if you did cash them out I would pay off his car because the amount owing in both is about the same but his payment is double. If his was paid off and you applied that payment to your car it would be paid off in no time.  
0 votes
by (200 points)
Pay off his car and snowball his payment with yours to your car.  
0 votes
by (200 points)
You can directly roll the old ones into a rollover IRA without any tax penalty. Don’t cash them out though.  
0 votes
by (150 points)
If you roll them into his existing 401k there should be no costs. Talk with his company. Do not take them out. You will lose way too much.  
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