1 Reply Latest reply on Oct 14, 2013 3:22 PM by cbslc

    Early withdrawal of Roth IRA


      I co-signed for a large $39,000 college loan for my youngest daughter so she could get into the college of her choice 2-3 years ago. Unfortunately, she had to drop out before finishing. Her loan has now become due, and she can't pay anything on it, so now I'm on the hook.  I'm 61 years old and my wife is 55 and we can't afford making payments for the next 20 years, so my question is would it be a wise choice to use my wife's Roth IRA, or my own Traditional IRA to pay off this loan and be done with it. What kind of penalties would there be for withdrawing from either IRA?

        • Re: Early withdrawal of Roth IRA
          I think you should be very cautious of doing either! I see those as your last options.
          But, you may want to look at your Roth contributions first. Remember you can take those our early. You cannot take out earnings early without penalty.
          Your traditional is all early penalty.