Ask an Advisor: With $240k in Debt, Should I Tap Retirement Savings to Pay Off Credit Cards?

Core Viewpoint - The article discusses whether individuals should use retirement assets to pay down high-interest credit card debt, particularly in the context of a declining investment portfolio. Group 1: Debt Management Strategies - The primary recommendation is generally to avoid using retirement accounts for debt repayment, although exceptions may exist for significant high-interest debt [4]. - A hypothetical scenario is presented where an investor with $50,000 in credit card debt considers a one-time withdrawal from an IRA to pay off the debt [4][5]. Group 2: Financial Projections - If the hypothetical investor withdraws from the IRA, they could end up with approximately $130,000 less by age 90 compared to not making the withdrawal [6]. - The impact of the withdrawal is subjective; for a $1 million portfolio, a $130,000 reduction may be acceptable, but for a larger debt like $240,000, the consequences could be more significant [7].