While studying, better to use student line of credit or retirement savings from previous job?

Submitted by 33-88-99 t3_11dj1le in personalfinance

I'm doing my PhD now. Im 31 years old. I worked for about 7 years before this and have about 14K in my retirement fund.

I'm on a scholarship, but it's sometimes not enough and I expect to go in the red by about 4 k per year over 4 years (16 k total debt expected).

Would it be better to put the debt on my student line of credit or use the retirement funds and have no debt on my credit ?

Thank you

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Comments

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RO489 t1_ja8wnmr wrote

What’s the interest on the line of credit? You’d need to weigh the withdraw penalty/tax against the interest rate.

Is your retirement IRA or 401k?

Could you work a bit on the side (tutoring, dog walking, babysitting) too close the gap a bit?

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33-88-99 OP t1_ja8z07i wrote

The interest rate on the student line of credit is about 1% I think based on previous statements I was looking at. I'm not american so I don't have those but it's actually in a government pension plan that has a return on investment of about 15% annually.

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Stock-Freedom t1_ja8xsic wrote

Do not take the retirement funds. They are a last resort after all lesser means have failed or cannot be reasonably employed.

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Win-With-Money t1_ja8woqq wrote

First off, how is the scholarship not enough sometimes?

You could get a job somewhere part-time to help cover those expenses. I would do this before anything else.

I advise against extending more debt for this and definitely do not pull from retirement if you can absolutely help it.

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33-88-99 OP t1_ja908xh wrote

Well, expenses come up. For example, I had to pay for my visa admin cost and a space heater this month. It out me a few hundred bucks over. I get about 800 per month. Actually, part of the scholarship stipulations is that I'm not allowed to have any other job while receiving it. I agree that I should try to avoid that, thank you

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