cashing out 401k to pay off student loans?

[xiphoid2010]

With housing prices on the rise and interest rate still low, tapping home equity can be a good option for those who built it up or bought one cheap last 2-3 years. I think you can get around 6% rate right now, and the interest you pay is tax deductible, so it's like swapping a 6.8%+ nondeductible student loan for a 4.5% (after tax deduction) home equity loan.

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[Doctor M]

I cashed out my 401 k for cash flow 4 years ago for our business. I would not however cash out your 401 k to payback student loans. Pay yourself first, keep contributing to your 401 K, and find another job to supplement your income. If your ROI exceeds the interest rate you are paying in your student loans, then i would say yes, do it,. But in this case you are looking to rid 6% loans and over 30 years in contributing 401k you will probably have a greater than 6% return. I would keep everything the way it is, get another job and pay it down.

 

[BMBiology]

Major emphasis to keep expenses down to a minimum. All of the savings can go toward student loan. You can save AT LEAST additional $1000/month if you maximize to minimize expenses. Some options might not be applicable to you:
1. Less lunch/dinner out
2. Cut cellphone bill
3. Cut cable bill
4. Less vacations
5. Live with roommate/move to a cheaper apt
6. Bike to work/get a beater for a car
7. Less toys
8. Stop buying new clothes
9. Buy item in bulk/only at discount/generic only
10. Basically, live like a broke student...

I must say it is rather sad that a pharmacist has to live like this