Ask Terry Questions Accessing retirement funds for liquid assests…

Accessing retirement funds for liquid assests…

By Terry Savage on July 15, 2014 | Financial Planning / Retirement

I work full-time, but have to dip into savings to make ends meet to the point where my savings are quickly fading. I have two student loans and a mortgage. I have some gold, but if I sell now, I take a loss. I am considering accessing funds from my 457 to pay off my house. I’m 52 years old and feel there’s time for the deferred comp account to recover with its rate of return currently at 5.8%. Any advice would be greatly appreciated!

Terry Says:  Ah, this is the very sad state of America.  Here’s what stands out — as a lesson to others –you are 52 years old and still have student loans!  That’s 30 years, probably, since college. If you have paid on time, you may be able to negotiate your way out of the balance.  That is the first thing I would attack — surely there must be some relief from the lender.  (If you want, and after you check with them, contact me at — because I think this is horrible!)

Yes, I know that comes nowhere near answering your question!  And this next sentence won’t do that either.  BUT, is there any way you could get a second job on weekends or evenings, just to pay off those student loan balances?  That is really the BEST solution — because it doesn’t ‘borrow’ from your future – -as either of your two other choices you mention will do.

When you borrow from your retirement plan you are taking money away from future growth. And if you lose your job, taxes and a penalty will come due immediately!  As for the gold, that’s a long-term hedge against inflation, also good for retirement planning.

If you think times are tough now, while you are still working, you don’t want to see how tough it is to make ends meet when you are older and hopefully retired.  SO,  please consider my two suggestions re the loans and another job.  I think that is the real way out of your situation.  (Or taking in a “boarder” — or having someone else in your family get a job to help cover expenses.)

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