Q. I am a 61, single parent, and can’t seem to come up with a strategy to get out of debt. Is it ok to take a loan from a pension fund? Also, a debt solutions company advised me to cut up all credit cards. Considering I have a child, it seems like eliminating all credit cards would be a bad idea and could ruin my credit further. Any thoughts about this?
A. I wouldn’t recommend you take a loan from your pension fund. It’s just too risky. What if you lose your job or get sick? It would be a great hardship to repay that loan, and if you couldn’t immediately repay it, you’d have to pay taxes on the amount withdrawn. Plus, since you are 61 years old, I assume you are thinking about retirement at some point in the next decade or so. You’ll need that money to keep earning interest and to help you when you stop working.
So don’t touch your pension assets. It’s better to try other strategies. [continue reading…]