What is the best way to pay off a large credit card debt before I retire?

I'm a 61 year old single female with about $45,000 in credit card debt. I owe $170,000 on my house that's worth about $200,000. My annual salary was recently increased to $127,000. My goal is to pay off my credit card debt at least 3 years before I retire. I will retire in about 5-6 years. I have about $250,000 in my 401k. What is the best approach for me?

Debt, Retirement, Women & Money
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2 weeks ago
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Before you start thinking about ways to pay off your debt, I recommend that you set a financial/budgeting plan. I would hate to see you pay the debt off and get back into debt right before retirement because your financial foundation is not solid enough. I am sure this brings you stress in your life and it needs to be addressed.

1) Your financial plan should help you find out what is the lifestyle you will be able to afford in retirement depending on the amount of money you have accumulated and the benefits you are able to get.

2) Slowly, during the next 5-6 years, you should adjust your spending to help you get in your retirement reality.

3) Once your plan is in motion, you should have savings to use to pay down your debt. I don't recommend that you use your retirement funds to pay it off. At your salary level, you would need to pay a lot of taxes on the lump sum.

Doing it this way, will help you get a hold of what you need to do financially to help you get prepared for retirement.

I hope this helps.

March 2016
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