EP 35 - Should I use my retirement to pay off debt?

Free Washington Retirement Planning Community⁠⁠⁠In this episode, we tackle one of the most common retirement questions:“Should I use my retirement funds to pay off my debt?”While paying off debt feels good, pulling large sums from your 403(b), 457, IRA, or annuity can create massive tax consequences, penalties, and long-term setbacks, especially for Washington State employees who rely heavily on their savings to supplement their pension.We break down:When using retirement funds might make senseThe hidden tax traps that come with large withdrawalsWhy paying off your home with retirement money can be a six-figure mistakeThe danger of wiping out savings to buy vehicles or eliminate loansHow small, strategic withdrawals differ from big lump-sum mistakesWhy “all you’ve saved is all you’ll ever have” in retirementThen we shift to the question of the day:How will Washington handle the new Secure Act 2.0 Roth catch-up requirement for high earners starting in 2026? We cover who’s affected, how DCP/403(b)/457 plans may adjust, and what employees should prepare for now.If you're thinking about paying off loans before retirement, or if you earn over $145,000 and want to understand the new Roth rules, this episode is essential listening.00:00 - Should you use retirement funds to pay off debt?00:34 - Question of the day01:20 - The tax consequences people often overlook02:57 - Paying off your house: the six-figure opportunity cost04:08 - Taxes, penalties, and the slippery slope of withdrawals05:00 - When using retirement money might make sense05:53 - The importance of strategic, small withdrawals06:43 - Why protecting future savings matters in retirement07:38 - Question of the day: Secure Act 2.0 Roth catch-up rules09:19 - How Washington might implement mandatory Roth catch-ups09:48 - What high-income DCP/403(b)/457 contributors should prepare for10:55 - Join the free community for updates and trainingLinks:⁠⁠Free Washington Retirement Planning Community⁠⁠⁠Plan 3 Investment Advice⁠⁠Schedule Meeting⁠More free resources at ⁠WATRSPERS.com⁠