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What's the biggest mistake you can make with your credit card debt? Suze says it's borrowing from other assets—like your retirement fund or your home equity—to pay off your credit cards. 

When you take a loan from your 401(k), you are taxed on the money you withdraw, Suze says. "When you go to pay it back, you are paying it back with money you have already paid taxes on," Suze says. "So when you go later on in life to withdraw that money again, you're being doubly taxed."

If your 401(k) is through work, Suze says you will be required to pay back any money you've borrowed immediately if you lose your job. If you don't have the money, Suze says that loan becomes taxable income—and you'll pay a 10 percent penalty if you're younger than retirement age.
FROM: Best Life Week: Your Money Plan 2009
Published on January 22, 2009
Please note: This is general information and is not intended to be legal advice. You should consult with your own financial advisor before making any major financial decisions, including investments or changes to your portfolio, and a qualified legal professional before executing any legal documents or taking any legal action. Harpo Productions, Inc., OWN: Oprah Winfrey Network, Discovery Communications LLC and their affiliated companies and entities are not responsible for any losses, damages or claims that may result from your financial or legal decisions.


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