I have $165,000 in my IRA which I'm really wanting to avoid using, but am seriously considering withdrawing or taking it all from this IRA to pay down my parent plus student loans. I am 58 yrs old I also have 370,000 in 401 k and another 180,000 IRA.

At what point does it make sense for me to take my IRA money and pay down some of this incredible student loan debt? Monthly payments are too high to maintain.

  • How much is outstanding on student loan? what is the rate of interest and monthly payments
    – Dheer
    Commented Oct 4, 2015 at 12:54

1 Answer 1


Welcome to Money.SE. As Dheer notes, we can come up with pretty good advice with more details.

Absent any more information, I'd offer this - money withdrawn today, from a traditional IRA, is subject to tax and 10% penalty. The day you turn 59-1/2, that 10% penalty evaporates.

Withdrawals at that time are still subject to ordinary tax at your marginal rate. If you happen to be in the 15% bracket, it may make sense (at 59.5) to withdraw enough to top off that bracket and use the extra money to supplement those payments. If you are already a 25%er, you have to decide whether this money is better spent paying the loans early. Much of that decision is based on the rates involved.

More important, in my opinion. what is the child doing? You borrowed money (I assume) to send a kid to college, and now he's out. Is he not able to chip in? $715K in retirement is pretty great, in the higher end of what pre-retirees have. It translates to just under $30K/yr in withdrawals at retirement. A decent number, really, but not a number that has you comfortably paying for this debt.

  • 1
    The roth-ira tag included without an ira tag suggests that the IRA might be a Roth IRA. If so, it might be possible to withdraw some of the Roth contributions without any tax or penalty even at age 58. Commented Oct 5, 2015 at 1:23
  • Good catch. I hope OP returns to clarify this. Commented Oct 5, 2015 at 1:48

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