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[arkabee]

i would like to clarify my previous comments inre: teaching and the skills needed etc as based upon my own "learning" experiences and in no way shape or form related at all to reality.

in other words, i was not speaking of "specialized" teaching and or teachers, but, like, teachers of junior high algebra and etc.

[V-Adore]

i would like to clarify my previous comments inre: teaching and the skills needed etc as based upon my own "learning" experiences and in no way shape or form related at all to reality.

in other words, i was not speaking of "specialized" teaching and or teachers, but, like, teachers of junior high algebra and etc.

Well, even junior-high algebra teachers (and "general" elementary-school teachers and such) need to have some skills that don't necessarily come with knowledge of their subjects: how to manage a classroom, quell disruptive behaviors with as little further class disruption as possible, keeping students at many levels of learning interested, quelling riots, &c. A lot of that comes with experience, but it also means that not everyone who remembers the material can be a capable teacher right out of the box. (My dad's learning that right now; he recently started teaching history at the Louisiana state honors high school, and his class-management skills are rocky, to say the least. He's a brilliant man with a Ph.D. in history, but he's just not used to dealing with a classroom of 20 squirrelly high-school kids.)

Anyway, special ed seems to get it hard, just because so many of the teachers going into it have this starry-eyed ideal of working with "special children" (read: the perfect Down-syndrome angels inexplicably popular in schmaltzy movies) and seem very shocked when they run into LD kids (many of whom are of average or higher intelligence and often frustrated), kids with severe behavioral disorders, MR kids who aren't easy to deal with, and so on... people seem to be relatively well-acquainted with the difficulties of teaching in general by now, but the idea that special ed is very hard seems to have somehow slipped the collective mind.

[AlohaDawg]

Okay, so now the real decision is at hand.

I have been offered a position at HMSA. It pays 14K less than what I make now as an overpaid Fed. I don't get severance as it turns out because I did in fact sign a mobility agreement in August 1991, before I even started.

I have agreed in principle to start in Mid May if I accept the position. I assume that health insurance will be free, that saves me $130.00 every two weeks.  So $3400 on health insurance and whatever the balance on that loan is, call it $2500 and there is $6,000, a little less than half of the difference.

Elinor wants to take a disbursement from my 401K and pay off all of our revolving debt, under the assumption that we would save multiple thousands of dollars on interest alone over the course of a year. It would require us to disburse at least 1/3 of the total, probably closer to half, and take those penalties.

The question I have is: is this a good idea or not? Why or why not?

Has anyone had to do this before that can tell me how it works out?

[pmcd9]

I wish I could help, but the only option I've ever had in these situations is 6 in one hand 1/2 dozen in the other.  It sucks to have to choose between the lesser of two evils.  That (dis)honor should be reserved for electing our public officials.

~Paul

[AugustWest]

Well, taking the money out of your 401K is theoritically a good idea IFF you can and will repay it.  Look at it this way:  you're paying (some what optomistically) say 12% on your credit card debt.  On a balance of $5000 that's $600 per year you're paying a credit card company.  If you borrow from your 401K you'll have to repay it with interest.  However, the interest you're paying is to yourself.  So you're not completely giving up any return on that money and you're not paying some evil-ass credit card company exorbitant rate of interest.

However, if you don't or can't pay your 401K back the IRS will nail your ass to the wall with penalties and the the taxes you didn't pay when the 401K funds were withheld from your paycheck.  Of course, if you're paying a usurous enough interest rate you may be better off even if you do get nailed by the IRS.

[CortJstr]

Well, taking the money out of your 401K is theoritically a good idea IFF you can and will repay it.

I just love that this is the type of forum where somebody can say IFF and not feel the need to explain it.

[miles]

Well, taking the money out of your 401K is theoritically a good idea IFF you can and will repay it.

I just love that this is the type of forum where somebody can say IFF and not feel the need to explain it.

I found this very pleasing as well.  I was also pleased that you pointed it out.

[AlohaDawg]

I'm just happy I remember what it means.

Good advice, Aug, but unfortunately it wouldn't be as a loan, it would be as a disbursement since they won't be my employers anymore and I can't really pay back in. So it's the reaming I don't want take.

[arkabee]

Why did you put money into your 401K?  If it was to "save" money, then take the money out and do whatever you want with it.

However, if you put it in so that you could retire, DO NOT EVER EVER touch that money.

I assume by "Revolving Debt" you mean credit cards, or mostly credit cards.  Credit card debt SUCKS.  However, it is possible to pay it off.  I can tell you, i would MUCH rather be paying of my cc debt AND have money in a retirement account than just paying off cc debt.

There are so many ways to dance the "paying off the cc dance".  keep balance transferring to no or low interest cards, get a second mortgage (now would be the time.  if i were a betting man, and someone asked me to put money down, i'd have to say i'd bet that interest rates are going up), "cinch" the belt a bit tighter, etc, etc, etc.

In my chair from a bajillion miles away, i would amateur psychoanalyze that the job change issue is causing all kinds of chaos and change and stress and etc.  those things are the "saving for retirement" killer.

inre: repaying the 401K.  if you, or anyone, is in a financial position wherein they "have" to take money out of their retirement savings in order to pay off creditors, etc, do you realistically think that once you take that money out of the retirement savings that there is any chance that money is going to go back in to replace it?

is taking the money out going to change the circumstances that caused the need to take the money out?  sure, you pay off the revolving debt.  but are the circumstances that caused the revolving debt gone?

Dawg, i, obviously, don't know your specifics.  But i _do_ know that with a family to take care of, your decisions are going to be much more difficult and have a lot more repercusions.  But if there's any way you can not mess with your retirement savings, please don't.

[Carlos del Vaca]

Don't forget that taking money out of your 401K plan now means you have to pay taxes on it.  It may seem helpful in the short run, but April 15 2006 you might have a nasty surprise, and need to pay a tax bill... with a credit card, maybe?

I'm with Ark, here:  I think taking money out of a retirement plan before you're retired is a bad idea.  We've played the game of juggling credit cards for some time now:  get one of them 0% (or the lowest you're getting) intro-rate credit cards, transfer everything to that, and pay what you can.  Then in a year or so when that intro rate expires, get another card with an intro rate, move the balance there, and cancel the previous one.

[AugustWest]

I'm just happy I remember what it means.

Good advice, Aug, but unfortunately it wouldn't be as a loan, it would be as a disbursement since they won't be my employers anymore and I can't really pay back in. So it's the reaming I don't want take.

Well, yes you can pay it back it, it just wouldn't be by payroll deduction.

[Pedro Picasso]

I paid $1000 into a 401K while I was in college.  The company went out of business, a practice which is de rigeur for small businesses that hire me.  The president absconded with the 401K money.  After hounding the Department of Labor for it for the following four years, a former co-worker finally pressured the former president to release the funds to us.  I was forced to take a disbursement.  This was good at the time.  JL and I needed the money.  Unfortunately, we needed the money too much to set aside the amount we would later be taxed on.  Come tax time, I had to pay income tax plus a 10% penalty on the $1000.  This was almost disasterous for us.  I keep better care of my tax situation now, but it's easier now that I have steady employment.

I'd follow your instincts and calculate how much you'd pay in interest in the coming years, and put that against the amount you'd have to pay in taxes and penalties.   You might want to pay an accountant of financial planner to go over the numbers with you to make sure there isn't something you're forgetting.  The fee they charge will seem miniscule compared to having a good decision behind you.  I feel so much better about life every time I talk with my accountant.

If you come out ahead by cashing out, it's a good idea.  But I would wait until you have the new job for a month or two so you can asses how your month-to-month finances come together when the dust clears.  This way you can make more informed calculations about how much money you can  throw at your debt in a year.

Again, I'm sure you've already considered these things being more experienced and knowlegable than I, but I'd like to help if I can.

[AlohaDawg]

Tomorrow is the last day here before 6 weeks of paid "Family Medical Leave" during which I will be resigning. It's a pretty weird feeling.

May 15th I'm slated to start the new job. This is something I haven't really done in a long time - stepped into a completely new situation. Particularly one outside of the public sector.

It's getting weird around here.

[jough]

Weird can be good, though.  I've always found starting new jobs to be exciting.  Scary at times, but exciting and invigourating nonetheless.

Will we still see you here, AD?  Can you access the board from home?

I hope so.  Keep us appraised.

[V-Adore]

Good luck and Godspeed, AD. May this adventure be a wonderful one for you and your family.