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No. of Recommendations: 9
leverage penalty free early ira/401K withdrawal

It's only penalty free if you've already been impacted by COVID-19. That means if your potential job loss is due to COVID-19, you could take the money out of the IRA or 401(k), but only AFTER you actually lose your job, not before. If your potential job loss is not due to COVID-19, and you haven't otherwise been impacted by COVID-19, withdrawals aren't penalty-free.

I would generally thing refi would be better option as I know I will get lower rate and cash back BUT my loan amount goes up and more risk if fail to miss some payments.

If you have a higher rate than you can get now, I would suggest refinancing now without taking cash out. It will lower your payment by both giving you a lower rate and by extending the term of the loan. Having a lower payment after you've lost your job will lessen the amount of cash you need to come up with each month. Also, note that cash out refis generally come with higher rates than refis without cash out.

With your currently higher payment, your loan is already at risk if you miss payments, and you have a higher risk of missing those payments because of the higher payment.

That said, what I would recommend is to:
1) Put together a game plan of what spending you will cut if you lose your job
2) Implement at least part of that game plan now, while you still have a job but are concerned you may lose it

That should generate some extra cash that you can put away to help cover you if you do lose your job.

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