No. of Recommendations: 5
>> Everything I read says using retirement money to pay down debt is a bad idea, but I am not sure. Any thoughts? <<

Is the interest rate 12.5%? Is that correct? I base that on your statement that there is $8900 a year in interest payments on a $71,000 balance.

Are you still working? How long do you plan to continue working? How is your cash flow? How aggressively can you pay down this debt if you don't tap into your retirement account?

I doubt that I'd use the retirement account to pay this down; I pretty much always come on the side of NOT using 401Ks and IRAs to pay down debt unless it is the *absolute* final option standing between you and foreclosure or bankruptcy.

Most likely, you need to do everything you can to tighten the belt. Take another job if need be. Eat rice and beans. If you are contributing to a 401K plan at work, cut back so that you only contribute up to what your employer will match. If they don't match at all, suspend contributions and put it all into paying down this debt.

Do whatever you can to increase the cash flow that can be used to aggressively pay down this debt. Raiding your retirement is most likely NOT the way to go.

#29
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