We are 5 years into this sluggish economy and while some
things have improved there are many people still struggle. Job growth has been sluggish and many people
are either unemployed or underemployed.
The longer the situation is sustained the higher various debts, such as
credit cards, can climb. The ever
increasing debt load can lead to feelings of helplessness and panic. This can trigger people to contemplate
pulling money from their retirement savings.
This really is not a good idea. The penalties from withdrawing funds early
are a 10 % tax along with other taxes and penalties. You need to consider as well the future
interest you are giving up. It can be a
costly endeavor.
The other thing to consider is do you really want to put
your retirement savings into a home that may still lose value. There is still a shadow inventory of
foreclosures and short sales held by the banks.
This fact alone will slow the home price recovery. So sinking money into a home that decreases
in value is putting money into someone else’s pocket.
The better alternative is to short sale your home now before
you get even further behind. Then find
someplace to live that you can afford and build back up your savings and
credit. Then you will be ready when the
economy recovers.
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