Should 24-Year-Old Cash Out $13K 401(k) To Pay Off $10K In Credit Card Debt? — 'I Feel Like I Can't Breathe'

Core Insights - The article discusses the intersection of financial decisions and mental health, highlighting a case where a 24-year-old worker considered cashing out a $13,000 401(k) to pay off $10,000 in credit card debt due to overwhelming stress [1][2] Financial Situation - The worker faced significant financial distress, with maxed-out credit cards and a credit score in the 500s, leading to the consideration of early withdrawal despite the penalties involved [2] - The emotional toll of debt was emphasized, with the worker expressing feelings of suffocation due to their financial situation [2] Community Response - The Reddit community largely advised against cashing out the 401(k), pointing out that the tax penalties and loss of tax-advantaged growth would have long-term negative consequences [3] - A community member shared personal regret over a similar decision, highlighting the frustration of lost compounding interest and the manageability of $10,000 debt for a young individual [4] Suggested Solutions - Recommendations included cutting credit cards in half and setting up autopay to manage debt effectively [4] - Another suggestion was to save $100 weekly and use bonuses to create an emergency fund, with a plan to pay off credit card debt systematically [5] - Following this strategy could potentially allow the worker to clear their debt in two years while establishing good savings habits for the future [6]