No. of Recommendations: 1
Roll it into an IRA and use your income to pay off the short-term debt!

I understand the psychological impulse for eliminating "the short term liability's hanging around your neck", but I've learn that it's usually best to take a calm, calculating, rational look at money.

How much is the 10% penalty hit relative to the savings from eliminating the short-term debt?

Have you considered taking out a loan against the 401K?

Does it have to be an all or nothing approach? If you're intent on tapping into your 401K for short-term debt relief, then tap only enough to eliminate the highest costing debt.

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