Buried In Nearly $100K Of Debt, A 23-Year-Old Train Driver Wonders If Cashing Out His 401(k) Is The Answer To His $66K Car Loan

A 23-year-old train operator turned to Reddit’s r/debtfree community recently with a simple but loaded question: Should I pull from my 401(k) to pay off my debt?

He explained that he has about $8,000 saved in his retirement account, $2,000 in savings he never touches, and around $10,000 in a regular bank account. But that isn't even close to covering the nearly $97,000 in total debt he's racked up—the bulk of which stems from a $66,000 loan for a used 2019 Dodge Challenger.

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Challenger Purchase Reactions

The post sparked many responses, most of which zeroed in on one major issue: the Challenger. "$66k for that junk," one user wrote. Another added, "You owe $66,000 on a six-year-old car?"

The sentiment was consistent—the car needs to go.

"Sell the Challenger and buy a beater car," one commenter advised. "Put [the money] you were paying for Challenger monthly toward credit cards and loans." Others questioned the original decision altogether.

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Don't Touch That 401(k)

The overwhelming majority of Redditors warned against touching the 401(k).

"Don't mess with your 401(k), sell your car and get a more reasonable one," one user said.

Another explained the long-term cost. Withdrawing $8,000 from the 401(k) might result in only $6,000 after taxes and penalties. If left untouched, the account could grow to $200,000 by the time the poster retires.

Financial Illiteracy and Lifestyle

The car loan is just the most visible symptom of a broader issue. "You need to wake up and sell that useless car," one comment read. "Sometimes your dreams are just that—dreams. You're in a nightmare."

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Another user put it straight: "You have a spending problem, buddy."

Others encouraged the original poster to take responsibility and start rebuilding. "Jesus… show this to your parents. Hopefully they slap the sh*t out of you. Sell the car, get 2-3 side jobs. I'll throw you the shovel but you're in for a hard few years. Better move back in with the parents, too." 

Still, the crowd wasn't all doom and gloom. Some users shared their own stories of recovery from massive debt and offered advice on budgeting, building an emergency fund, and using snowball or avalanche methods to pay down balances.

"Don't panic," one Redditor wrote. "But be deliberate. Coming from someone who was in your shoes, it is possible to get out from under this. But not without sacrifice."

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