Should I cash out my 401K now or wait until later?

Here's my problem. I am 33 years old, and I was in a debt management program, in which I owed only $4000. However, I bought a new car, and they jacked up my balance to about $7000. I have about $9000 on my 401K, which I can cash out and pay this pesky debt management thing. Should I do it, or should I stick it out and have them raise my balance every time I get something!? My thing is, I am paying $300 a month for this. I figured that if I pay this loan off, I can take maybe $200 a month and replace what I took from my 401K. What do you think?

Answers:
Cash it in. You may get hit with the up front percentage from the IRS but you will continue to pay the interest rate on all the bad debt. Your savings percentage rate in a 401K is not going to be as high as your interest rate on your bad debt, therefore, you will gain more by paying off the bad debt and then start saving like mad. Also, once you hit a certain age, I think it's 55, you can almost put all of your earnings into the 401K because of a plan they call "catch up". You should speak to your 401K administrator. Goal: Pay off debt, save money. In that order.
You should stick it out. If you have a home get a home equity loan to lower your payments. if you cash in your 401K you will be penalitized 10% plus have to pay taxes on 20% or more.
Bad idea. Keep the money in your 401k. If you cash it out you will not only have to pay the taxes on it, but you will also have to pay a 10% penalty to the IRS for cashing it in early. Would you want to pay $900 to Uncle Sam for cashing out your $9000 401k? Its not worth it. You worked hard for that money and you should keep it for what you saved it for!
Id stick it out only because this will most deffinatley cme in handy later in life.but if you have no other choice and are struggling then dont harm yourself more than needed if you have the money. Ask yourself how much you need the money or what you could do with the money later in life. You will be the only one to make this choice.
Horrible idea. 'Nuff said.

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