Should I use my IRA instead?
You can use your traditional IRA to pay down debt, but as with a 401(k), any withdrawals before the age of 59.5 are subject to taxes and a 10% penalty. However, there are exceptions, like disability, qualified education expenses and death.
If you have a Roth IRA, you can withdraw funds tax-free if you’ve had the money in the account for at least five years. But you’re limited to what you’ve contributed. And if you’re under the age of 59.5, any part of the withdrawal that comes from investment earnings is subject to taxes and to the 10% penalty.