Ask Terry Questions 403b funds to pay off debt.

403b funds to pay off debt.

By Terry Savage on November 29, 2023 | Credit/Debt

I’m set to retire via TRS in spring 2025. We still have a lot of credit card debt we are chipping away at. We don’t want to refinance our mortgage to pay it off. would it make sense to have use my 403b fund to pay off the debt when I retire at the end of next school year? Thank you!

Terry Says

That all depends on your situation.
First, know that all withdrawals from your plan will be taxed as ordinary income –and may put you in a higher tax bracket, so dothe math!
Second, if you pay off the cards, can you trust yourself to have learned a lesson –and not charge them up again??
And finally, will that leave you with enough money to help you through retirement.

In general, paying of high rate cards is always financially preferable –and will also give you peace of mind as you enter retirement.



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