cavebat2000 wrote:Dignan wrote:MTal wrote:As a series 7/63 licensed broker...I can tell you this is an incredibly DUMB idea.
Would you mind elaborating? Why is it a dumb idea?
If you roll your 401k into an IRA, you may withdraw from the IRA, without the 10% penalty, for law school tuition expenses. You will, of course, have to pay income tax on what you withdraw. However, you would have to pay income tax on that money in your retirement anyway, when you will (should) have a much higher total income than you have in law school. And, given the direction that our Social Security and Medicare systems are headed, federal income taxes are probably going to be much higher 30 years from now.
It seems to make sense to withdraw from an IRA to pay for tuition expenses, particularly if doing so helps you avoid having to take out Plus loans (with their 8-9% interest rate). What am I missing?
Unless your 401k is HUGE, I'd say it is a mistake to use your retirement money to pay for lawl school. Of course, if your like 25 years old, then i suppose that makes a difference because you would have a much greater amount of time for your law school investment to pay off.
I would rather have 0 in retirement and as little debt as possible. I have a long time to restock that retirement fund after law school. And if i can avoid those grad plus loans at 8-9% then i can even add more to my retirement account. I lot of people say that this is a bad idea but i really doubt that they have thought much about it.