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Should I refinance or withdraw from IRA to pay off 25K of credit card debt? I am 64, self employed earning about 30K/yr. My wife is retired. credit card debt snowballed and I now want to pay it off but cannot afford the monthly payments. Have about 300K in IRA.

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    Refinancing home is almost certainly the better choice. More important question is how you're going to stop borrowing and pay that down....
    – keshlam
    Apr 7, 2015 at 12:50
  • I hope this doesn't come off to crass but I would subtract your current age from your projected age of death. If the interest + principal paid in that time frame to your credit card is less than the total due on the credit card making normal monthly payments, then I wouldn't take out of your IRA to pay off the card.
    – DotNetRussell
    Apr 7, 2015 at 15:28
  • btw, in this question money.stackexchange.com/questions/49595/… a guy has pretty much the same problem (25k in credit card debts and some money in deductible saving account)
    – Max Li
    Jul 6, 2015 at 20:31

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You have a standard deduction of $12,600 (Married filing joint, MFJ) plus $8000 in exemptions. A total of $20,600 off the top. In other words, just under $10,000 taxable unless you have other income you haven't disclosed. For MFJ, you are at the 10% bracket up to $18,450 in taxable income.

I would withdraw just enough to 'top off' the 10% bracket each year, whether or not you send it to pay down the card. You don't disclose the rate, but if you are able take a low interest loan to get to a sub 5% interest rate, I'd do that.

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