We have 67k in credit card debt and need a way out that doesn't compromise our integrity. We live paycheck to paycheck on 140k annually in Oklahoma. We have about 60k in a 401k, but that is basically all the assets we have. We don't have time to chip away at this. We are in our early 40's. Any sound advice? I know it's taboo and not financially sound, but I am willing to withdraw the 401k to get us out of as much debt as possible. Getting out from underneath the debt is worth sacrificing the future. I can still build a future once we get out of debt.

Do you have a budget? Living paycheck to paycheck on 140k sounds to me like you've got a black hole in your finances devouring your income. You've got to find out what it is so we can help!

My path to financial freedom has mainly consisted of being frugal with food (generic brands or name brand + coupons while on sale - home cook every meal, no eating out), doing without expensive toys, cutting out most non-essential bills/services/subscriptions, fixing/upgrading/maintaining my own equipment DIY style, searching online for great deals/discounts on things I'm going to buy or do anyway (Groupon, Restaurant.Com, FatWallet etc) and just generally exercising self control over my spending.

I've eliminated 30k worth of combined debt (student loan/auto/credit card) in two years by following the above rules.

You need to give us more info to help you.

Where in your budget are you willing to cut back?

I vehemently advised against depleting your 401K, with your income you are really behind on saving for your retirement.

I suggest looking into a plan on cutting back to pay your debts and to contribute towards your retirement without cutting your budget to the bone with no income towards "fun".

If you genuinely want people on this board to help you, you're going to have to post some more information, aside from your income. People would need to see what you're spending---and, just as importantly---what you're spending your money on.

My husband and I live on less than 90K (gross) in one of the most expensive places (NYC) and we have no debt. You will be able to fix this---as long as by "doesn't compromise our integrity" does not equate to "doesn't alter our lifestyle."

Honestly, at your age, I would be too worried to pull the money out of my retirement and/or other investment accounts. What happens if your income isn't sustainable in a few years and you don't have any additional funds to put into an account somewhere for your future?

Agreed with others, we need a bit more info on your budget and expenses to help you out. Do you have other debt? If so, give us the type, amounts, and interest rates.

However, in general, it looks like you have a spending problem, not an income problem. 140k in Oklahoma (relatively low cost of living) should put you in a pretty good position regarding take home pay. Where is your money going?

Ditto all above posts.

I know it seems ridiculous, but you probably can get rid of your credit card debt if you are willing to make sacrifices and be a bit patient. I know it's tempting to find a "way out", like you are asking for, but with your annual income significantly higher than the debt you have, you should be able to set aside a third of your budget for this.

What are your major expenses? What are the absolute necessities in your budget, and what can you afford to cut back on?

Stop using your credit cards. Immediately.

Have you considered taking a 401k loan? You'll pay interest on it, sure, but it's interest to yourself, and surely a lower rate than what you're paying the credit card company. I'd hold off on 401k contributions for the time being until you take care of your CC debt.

I agree we need more information. But, given what little we know, here's a plan:

You make $140000 a year. Assuming that is gross and assuming taxes eat up about 35%, you have over $90,000 after taxes.

Take 1/3 of that, $30000 a year, $2500 per month, and pay it toward your credit cards. You will have them paid off in about 3 years, because you'll be paying interest.

Oh, and STOP SPENDING MONEY WILDLY. Do not spend a dime unless you already have the cash to pay for it in addition to the $2500 extra you are paying toward your past spending.

DoingHomework really has the right idea here imho. It'd be a tough three years, but compared to some, it seems like you guys really could tackle this debt pretty quickly.

Sure you could do it. You'll only have around a net 40% of your 401k balance, however, after all the taxes and penalties are inflicted.

And then what do you do the next time you run into difficulties? Which very well might happen...you never know what life has in store for you.

Go to the Dept. of Justice website to find an approved credit counselor in your area: http://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm.

Stop using your credit cards, and get a plan for repayment put into place with the credit counselors. Go on a budget and learn to live on less than you make. That's what retirement's all about - learning to live on less than what you had before. We actually have MORE income retired than we did working, but increasing costs and inflation always hurt. House maintenance, for example, doesn't go away magically just because you aren't getting performance bonuses any longer.

To replace a $140K income if you retired tomorrow, you would need….$3.5 million (4% drawdown). Are you close to that? Doubtful.

Reduce your expenses, pay off expensive revolving credit, and start saving seriously.

The OP makes $140k per year and yet is living paycheck to paycheck. He asked for advice on May 23rd and hasn't logged back in since then. Unless the OP shows himself to actually care about his financial situation and we get more information I would say continuing this thread might be a bit redundant.