Answer

Dear XXXXXXXXX,

 

Greetings. In a way, you are much better of than most of the people given your guaranteed income.

 

Even if you presume you may not add to anything, you are earning $6,000 Per Month and is decent by any standards. Your house having been paid off is biggest relief on your finances.

 

Coming to your query, as you have rightly mentioned, Credit Card Debts is something yyou need to urgently attend to. My suggestion would be structure repayments of Credit Cards in such a manner that if should get clean in 3 years. It would not be advisable to pay them straight out of your savings or 401k.

 

You can certainly withdraw 401k and given your age, you wont be penalized or taxed. You are anyway paying 750 Per Months. If we plan to clear credit card debts, as per my calculation, you should pay them off 50% i.e. around $15,000 or so in one payment now and spread rest of the amount over period of 3 years.

 

The paymentst that you are making right now are more than required to do that. If you could stretch litter further and pay around $1000 to Credit cards, you may be able to clear all up in around little less than 2 years.

 

To sum up, my advice to you would be to pay off half of credit card debt at one go either from your savings or preferable from 401k, and clear up rest by making payments of 1000 per month. (given that you are already paying 750 now). Since your principal outstanding will be reduced to half, your more amount of repayments would go to principal and this wil also largely save on interest costs..

 

I hope the above helps...

Regards,