Cashing out retirement account

[MR Amherst]

I have a CALPERS account for $12,000.

I’ve moved from CA, and am considering what to do with the money.

I can roll it into an IRA tax free, BUT . . .

I have a fair amount of debt, pay PMI on my house and need a new (used) car.

Is it wise to take the 20% tax penalty and use the money to pay off debt/ buy car?

[UCGal]

You still need to retire someday, right?

I would roll it to a self directed IRA and let it grow towards retirement.

I’m funny that way.

[UCGal]

You still need to retire someday, right?

I would roll it to a self directed IRA and let it grow towards retirement.

I’m funny that way.

[UCGal]

You still need to retire someday, right?

I would roll it to a self directed IRA and let it grow towards retirement.

I’m funny that way.

[UCGal]

You still need to retire someday, right?

I would roll it to a self directed IRA and let it grow towards retirement.

I’m funny that way.

[UCGal]

You still need to retire someday, right?

I would roll it to a self directed IRA and let it grow towards retirement.

I’m funny that way.

[DataAgent]

ditto UCGal

Put the money in something safe like Vanguard Wellington VWELX and forget about it.

[DataAgent]

ditto UCGal

Put the money in something safe like Vanguard Wellington VWELX and forget about it.

[DataAgent]

ditto UCGal

Put the money in something safe like Vanguard Wellington VWELX and forget about it.

[DataAgent]

ditto UCGal

Put the money in something safe like Vanguard Wellington VWELX and forget about it.

[DataAgent]

ditto UCGal

Put the money in something safe like Vanguard Wellington VWELX and forget about it.

[(former)FormerSanDiegan]

Is that $12,000 all your retirement savings ?

Imagine yourself nearing retirement.
In 25 or 30 years, that could be ~ 50K (assuming reasonable, not excessive returns).

Wouldn’t you rather have those funds for maybe a few months of food and property tax, so that you can remain in the home you are currently paying PMI on.

On the other hand, if you are in a position where you could eliminate PMI by using these funds to pay down principal, that could work, assuming that you pay yorself back by funding an IRA for the next couple opf years.

Of course, you will be taxed at your income tax rate plus a 10% pentaly, so you might only end up with $9K or so to spend (if you are in a marginal 15% tax bracket)

[(former)FormerSanDiegan]

Is that $12,000 all your retirement savings ?

Imagine yourself nearing retirement.
In 25 or 30 years, that could be ~ 50K (assuming reasonable, not excessive returns).

Wouldn’t you rather have those funds for maybe a few months of food and property tax, so that you can remain in the home you are currently paying PMI on.

On the other hand, if you are in a position where you could eliminate PMI by using these funds to pay down principal, that could work, assuming that you pay yorself back by funding an IRA for the next couple opf years.

Of course, you will be taxed at your income tax rate plus a 10% pentaly, so you might only end up with $9K or so to spend (if you are in a marginal 15% tax bracket)

[(former)FormerSanDiegan]

Is that $12,000 all your retirement savings ?

Imagine yourself nearing retirement.
In 25 or 30 years, that could be ~ 50K (assuming reasonable, not excessive returns).

Wouldn’t you rather have those funds for maybe a few months of food and property tax, so that you can remain in the home you are currently paying PMI on.

On the other hand, if you are in a position where you could eliminate PMI by using these funds to pay down principal, that could work, assuming that you pay yorself back by funding an IRA for the next couple opf years.

Of course, you will be taxed at your income tax rate plus a 10% pentaly, so you might only end up with $9K or so to spend (if you are in a marginal 15% tax bracket)

[(former)FormerSanDiegan]

Is that $12,000 all your retirement savings ?

Imagine yourself nearing retirement.
In 25 or 30 years, that could be ~ 50K (assuming reasonable, not excessive returns).

Wouldn’t you rather have those funds for maybe a few months of food and property tax, so that you can remain in the home you are currently paying PMI on.

On the other hand, if you are in a position where you could eliminate PMI by using these funds to pay down principal, that could work, assuming that you pay yorself back by funding an IRA for the next couple opf years.

Of course, you will be taxed at your income tax rate plus a 10% pentaly, so you might only end up with $9K or so to spend (if you are in a marginal 15% tax bracket)

[Author]

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