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Retirement funds

By Terry Savage on August 16, 2022 | Credit/Debt

I am a 67 year old retiree and I have a 2500.00 expense I’m trying to decide to use a credit card or take the money from my IRA which due to the economy is loosing money daily?

Terry Says

It all depends on how quickly you can repay that credit card balance. It makes no sense to pay 18% interest on a balance.
On the other hand, if you do an IRA withdrawal, you’ll have to pay income taxes on the withdrawal next April. Or have withholding taken out. That means to net $2500 you must take out even more (about $3,000) — at a 20% withholding!
Only you can make that decision. But if you could earn an additional $400 a month — babysitting, other work? — then you could pay down the CC balance quickly and let your money keep growing in your IRA.

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