Steve Bucci is president of CCCS Credit Advisors. Go to www.creditcounseling.org for additional debt advice. The Debt Adviser is a weekly feature of bankrate.com. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! By Steve Bucci bankrate.com Question: If the economy crashes, I know my 401(k) will disappear, but my debt won’t. So, I was thinking of raiding my 401(k) to pay off my credit-card debt. What do you think? – Stephen Answer: This is curious thinking. People have many reasons for “raiding” their 401(k)s, but banking on the economy crashing is a new one to me. I believe I understand your concern. You think that your 401(k) will be worth much less if the economy takes a turn for the worse. In this, at least, we can agree. You will at some point want to retire. It is generally considered desirable to have an income source other than Social Security to accomplish that goal. If you raid your 401(k) now to take care of your credit-card debt, you may be jeopardizing your retirement. The reason being, the money that you “raid” will be taxed at your current income-tax level, instead of the likely lower level that you would be at when you retire. You also will be hit with a substantial early-withdrawal penalty. However, the biggest hit that you take by withdrawing from your 401(k) is future earning potential. Even crashes recover. I had the unpleasant experience of riding the market down between 2000 and 2003. Since then, I have been pleased with the return enjoyed by my 401(k). I recommend you leave your 401(k) intact, make regular contributions if you can, and explore other options for paying off your debt.
AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREWhicker: Clemson demonstrates that it’s tough to knock out the champBut Russia ignored her calls to punish Iran. Despite continued strong support from NATO allies in the wake of a new U.S. intelligence report that concludes that Iran actually stopped developing atomic weapons in 2003, Rice could not persuade Russian Foreign Minister Sergey Lavrov of the urgency of fresh sanctions. Rice said her talks with Lavrov were “an extension of other conversations we have had,” suggesting that the two didn’t see eye to eye. White House officials maintained an optimistic tone. Based on contacts with Russia, China and other permanent members of the U.N. Security Council since the release Monday of the new intelligence estimate on Iran, “we are still committed to Iran stopping its enrichment,” said National Security Council spokesman Gordon Johndroe. “And we will eventually get a third U.N. Security Council resolution.” Bush spoke to Russian President Vladimir Putin on Tuesday and Chinese President Hu Jintao on Thursday. Vice President Dick Cheney, speaking in Kansas City to members of the Veterans of Foreign Wars, said, “In the case of Iran, we’re dealing with a country that is still enriching uranium and remains a leading state sponsor of terrorism, and that is a cause of great concern to the United States.” Cheney said others in the international community, including Russia, share that concern. At the Pentagon, senior military officers told reporters the U.S. intelligence revelation that it believes Iran scrapped its nuclear weapons design effort in 2003 has not triggered new instructions by the Bush administration to speed up or slow down any Iran crisis planning. “There has been no course correction – slowdown, speedup – given to us inside the Joint Staff” for military crisis planning, said Marine Corps Lt. Gen. John Sattler, the director of strategic plans and policy for the Joint Chiefs of Staff. Attending the Bahrain security conference with Gates were Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, as well as Adm. William J. Fallon, chief of the U.S. Central Command, which is responsible for U.S. military operations throughout the Middle East. Fallon spoke to reporters about Iran. “Their behavior has really been a problem, and to the extent that it destabilizes the region, which it does, then it becomes a problem for us,” Fallon said. Defense officials have said Iran’s delivery of weapons and other support into Iraq and Afghanistan and the detention of British sailors earlier this year are key activities that threaten security in the region. And Gulf country leaders, Fallon said, have told him that their concern “is more the pressure that they feel from Iran as they want to dominate this area.” A senior defense official traveling with Gates said the secretary planned to tell the Bahrain conference that Gulf countries have shared commercial and security interests, and that the more they cooperate the more the world will benefit. One key area would be shared efforts in an early warning system because of the ballistic missile threats from Iran. The official spoke on condition of anonymity because of the sensitivity of the issues. A U.S. Navy commander, meanwhile, said Iranian threats to close the Strait of Hormuz, a vital commercial waterway at the tip of the Gulf, are the greatest concern for maritime security in the region. Vice Adm. Kevin J. Cosgriff, commander of U.S. Naval Forces Central Command, said while the likelihood of that happening is low, concerns about Iran consume the region – and his day. “I wake up thinking about Iran, I go to bed thinking about Iran,” Cosgriff told reporters.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! MANAMA, Bahrain – Defense Secretary Robert Gates planned to tell Gulf countries today that they must work together to help the U.S. counter Iranian threats, including Tehran’s ballistic missiles and meddling in Iraq. Secretary of State Condoleezza Rice said the United States still wants new sanctions. Gates, ending a weeklong trip to the region, intended in his keynote speech at an international security conference in Manama to urge Gulf allies to cooperate more as part of a broader strategy for containing Iranian influence, according to U.S. officials traveling with Gates on Friday. Gates’ speech was to follow Rice’s assertions Friday in Brussels, Belgium, that Washington would continue along a two-track strategy, pressing for new sanctions against Iran while holding talks to persuade Tehran to come clean about its nuclear program.