Should We Use Our Retirement Money to Repay Our Credit Cards? – Deb

“Dear Steve,

we retired early and my husband has retirement from ny state dept of corrections and a 403b with 120,000. we are eligible to take money out of 403 with no penalty

we have 52,000 in credit card debt and wonder if we should take the money out of 403b plan as we pay no penalty. recently it is harder to find jobs to supplement our retirement and hoping paying off credit cards would help.


Dear Deb,

Just thinking pragmatically rather than emotionally here it makes more sense for you to clear the decks of the debt using a legal fresh start solution like bankruptcy than to sacrifice your retirement money, which you will need for basic care in upcoming years. Who knows if benefit programs will survive in the future when you need them.

I would urge you to first explore bankruptcy. You can click here to find a local bankruptcy attorney and talk to them for free. That would be the preferred option but you could always settle the debt rather than take such a big chunk out of your needed retirement. You can click here for debt settlement information.

I would strongly encourage you to check those options out first. Let’s put this debt to rest ASAP so you can live within your income and preserve your retirement funds to protect yourselves in the years ahead so you don’t need to eat dog food.

Please post your responses and follow-up messages to me on this in the comments section below.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Damon Day - Pro Debt Coach

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