early withdrawal from 401k

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Greetings question on early withdrawal from 401k we have 35K on credit cards @ 30% interest rate 28 % tax bracket + 10% = 38% penalty
does it make sense to make an early withdrawal, it would take us around 24 months to pay off the credit cards on our own thanks
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The tax hit is a one year, one time thing. The interest on the card balances is annual over as many years as it takes. Remember that you would need to pull out more than the $35K to cover taxes, unless you have that from some other source. So the gross 401K withdrawal would need to be more.
Under either option you go with, the thing to be absolutely sure you do is to keep putting back into the 401K plan as much as you can (max it out) and to not run up balances on credit cards.
Otherwise, while you might think it comes down to strict numbers on the page, it's much more refined than that, with your level of comfort having less in savings, cash flow considerations, etc.
It should be clear that this year is the year to report as much income as possible - before tax rates go up as early as next year.
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Paul Thomas, CPA
www.paulthomascpa.com
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