- You can request a distribution from your IRA for any purpose, including paying off credit card debt. However, nonqualified distributions from an IRA will be hit with a 10 percent early withdrawal penalty on the taxable portion.
- Depending on the size of your credit card debt and the interest rate, you may benefit from paying off the debt with funds from your IRA even though you would have to pay the early withdrawal penalty. You should weigh the potential return on your IRA against the interest and late payment fees your credit cards will charge.
- Roth IRAs permit withdrawals of contributions to be taken tax-free and penalty-free at any time. All Roth IRA contributions come out before any earnings are taken out. In addition, the IRS permits exemptions from the early withdrawal penalty in several circumstances, including if you have medical expenses that exceed 7.5 percent of your adjusted gross income or higher education expenses.
- Advertisement -
"Business & Finance" MOST POPULAR
- Advertisement -
EDITOR PICKS & Articles
- When Barbed Wire Becomes a Bush
- How to Stencil a Coffee Table With Gold Leaf Paint
- How to Remodel Bath & Shower Fixtures
- Measuring and Fitting Your Carpet
- How to Decorate Your Master Bedroom in Garden Style
- The Essential Features and Benefits That Are Exclusive to Glass Partitions
- How to Choose Cleaning Supplies to Use with Marble
- How to Make Pleated Blinds
- Special Features Of Kelly Hopen Kitchen Ideas
- What Is the Right Height For Light in Your House?
Subscribe to our newsletter
Sign up here to get the latest news, updates and special offers delivered directly to your inbox.
You can unsubscribe at any time
"Business & Finance" Categories
Advertising & Marketing
Arts & Crafts
Bankruptcy
Blogging
Biz
Business Insurance
Business News
Careers
Corporations
Credit
Debt
Electronic Commerce
Economics
Entrepreneurship
Finance
Home Based Business
Investing & Financial Markets
Loans
mortgage
Outsourcing
Personal Finance
Renting & Real Estate
Shopping
Small Business
Social Media
Stocks-Mutual-Funds
Taxes
Wealth Building
Stay With Us
"Business & Finance" MOST POPULAR
"Business & Finance" Lastest Articles