Should I use my 401(k) to pay off high interest credit card debt?

I have $407,000 in my 401(k). My husband has $250,000 in his 401(k). I am 5 years away from retiring from the federal government, at which time I will also have a pension of approximately $40,000 annually. My husband is 8 years away from retirement. I invest 10% into my 401(k) and so does my husband.

I have $43,000 in credit card debt with 9%-15% interest rates. I am exploring 2 options for paying it down:

1) use my 401(k) at 2% interest over 3 years. With this, I would pay approximately $750 in interest and stop using my credit cards so I can be debt free at retirement.

2). use the "Zilch" system that assist with paying the debt. This would cost thousands in interest and more than 3 years time with this much debt so I would go into retirement with debt.

Our house will be paid off in 8 years which will free up $2000 monthly and I plan to increase my 401(k) contribution to 15%. Is using my 401(k) a good idea?

Debt, Retirement, 401(k)
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October 2017

Paying off a debt with 9-15% interest (Which incidentally is quite high) is like getting a guaranteed return of 9-15% on your money- therefore it is highly desirable that you pay it off. While, your 401K balance could earn you similar or higher returns depending on your asset allocation, there is no guarantee. 

You can get a home equity loan at a lower rate depending on various factors- this has a tax advantage as you can possibly deduct the interest against your income while still participating in an appreciation of your home. You can pay off the loans instead of contributing to your (and possibly your husband's) 401K - while this is less than the value of your debt it is a better option than taking a 401K loan. You may also want to see if you can reduce other expenses at least temporarily until your debt is paid off.

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October 2017