I’m 27 years old, about 4 years into my career in investment services, making $75,000 a year and have about $30,000 in my 401K account (currently contributing 9% and receive 3% company match, and >5% ROR yearly). Between the ages of 19-24, I racked up about $13,000 in credit card debt across 4 accounts, all at 23-27% APR (yikes!). Minimum payments on these cards amount to ~$600/month. After leaning my expenses out (cutting out expensive gyms, cable, etc.), I am looking to rid myself of the credit card debt to better my financial situation even further. My necessary payments for all bills amount to ~$2,000 a month, and my take home pay is $3,400 a month. My thought process is that I could potentially lower my total bills to ~$1,400 a month by withdrawing from my 401K now and replenishing it with a short period of time + upping my contribution rate to about 12% or so immediately. I can use that extra income for other investments while raising my credit score (taking a huge hit currently due to credit usage).
Side note: I own a small home and partially support an elderly parent with the help of other siblings. However, if it were to come down to it, I would not be financially responsible for this person. But I do help now as a courtesy.
Not being rude to this parent, I met this person when I was 18.
I’m looking for advice, based on the above situation, as to whether withdrawing from my 401K now with plans to replenish the money somewhat soon and raise my contribution amount immediately is a good idea. At 23-27% APR, I’m thinking yes but wanted to gather some input from more experienced persons.