You want to live out your retirement days as stress free as possible.
That means paying off your credit card debt before you retire from your job.
Getting rid of debt before retirement means you'll have less of your retirement money to cover regular living expenses, your mortgage if you still have one, and other things you enjoy.
The closer you get to retirement, the more you should think about paying off your credit card balances.
Options for Paying Credit Card Debt Pre-Retirement Delay Retirement.
If you're approaching retirement and you still have debt, consider delaying retirement until you've paid off your balances.
Paying off your debt can be easier if you've already met your retirement goal.
That way, you can use the money you were contributing to your retirement plan to pay off debt.
Get Another Job or Start a Business.
Another alternative if you're ready to retire from your current job or you're already retired is to use your retirement income to cover living expenses and get another part-time or full-time job to pay off your credit card bills.
Or, if you don't get another job, perhaps you can start a business or make money from a hobby.
Be careful about the tax consequences of a decision like this - you could be pushed into a higher tax bracket, which would mean you owe more taxes than normal.
Draw Your Social Security Benefits.
If you're over age 65 and still working, you can start drawing your Social Security benefits to pay your debt.
If you're still under 65, you may be able to get Social Security benefits.
Until you reach age 65, you haven't yet maxed out your Social Security benefits.
Waiting until you reach retirement age would generally be more beneficial because you'll get the maximum amount of money each month.
If you're facing bankruptcy because of your credit card debt, taking your Social Security benefits early could be beneficial.
Use Your Required Minimum Distributions.
Once you reach age 70 ½, the government requires you to start taking some money from your retirement accounts.
This minimum required distribution could go toward reducing your credit card debt, if you're still working.
The amount you're required to take out depends on your age and life expectancy, the age of your living spouse, and whether your spouse is the beneficiary on your account.
Withdraw From Your Retirement Account.
Generally, it's not a good idea to withdraw money from your retirement account just to pay off credit card debt.
In some circumstances, you could be hit with an early withdrawal penalty.
Whether you use retirement money to get rid of your credit card debt depends on the amount of debt you have the amount of money you have in your retirement accounts.
You may be able to spare a few thousand dollars.
Consider your options carefully.
If you're having trouble making your credit card payments, get help from a consumer credit counseling agency.
Under a debt management plan, you could pay your credit card debt off within five years.