Author Topic: Pension for Debt  (Read 458 times)

scholls22

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Pension for Debt
« on: January 04, 2019, 08:04:10 AM »
Hello all! I recently took a vested retirement from law enforcement and have $56K in that account. I also have 45K in credit card debt which has me paying around 950/month in minimum payments. I am 39 years old and my new job has me currently at $75k a year and my wife makes $42K. Would it make any sense to withdraw the pension funds to pay off or a large chunk of the credit card debt? I know that I will be taxed on it. My thoughts are that even with cutting back it will take a good bit of time to pay off the credit cards and I will struggle to make minimum payments.  Once the debt is paid off, I could use that for a large emergency fund and eventually put into my new company's 401k.

I do have a student loan payment, as well as an SBA disaster loan that I could make additional payments.

I appreciate any and all advice!

nurseart

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Re: Pension for Debt
« Reply #1 on: January 04, 2019, 08:40:00 AM »
Thanks for your post! For the best advice, I would suggest posting a more full picture of all of your debts including interest and your spending.

In general, I would advise against taking out of a vested retirement account to pay debts but it depends on the individual picture and interest rates.

With a household income of 117k I don't see why you couldn't pay off the credit card debt within a year.

TexasRunner

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Re: Pension for Debt
« Reply #2 on: January 04, 2019, 10:40:44 AM »