I have been reading quite a bit on the site, but this is my first post to the forum. I am the target audience….in middle-class poverty. Details: Married, 2 kids, mortgage, auto loans (2!), credit cards and obscene student loans. We pay all our bills on time, but we live paycheck to paycheck and save a meager few hundred each month. I have a 401k that I contribute to and a Vanguard IRA that was rolled over from a previous employer 401k that I do not contribute to. We have resolved to adjust what we have become ‘accustomed’ to in order to live debt free and are currently trimming the fat (cable is gone, cell plan is on its way out and groceries are adjusted weekly).
However, my question/inquiry for today is regarding my IRA and credit card debt. In an effort to really get things moving I’m considering using my IRA to pay off my credit card debt. This will leave more money for reducing other debt quicker (cars/student loans)however I’m concerned with not having that little ‘security blanket’. There will be a tax implication of about 20% for withdrawal, but the credit card debt will be completely paid off. I would really love any input on this so thanks in advance for helping a newb on her way to becoming debt free!