Help Me Retire: We have $190,000 in retirement savings and want to use the COVID-related distribution rules to pay off $40,000 in debt — should we?

Help Me Retire: We have $190,000 in retirement savings and want to use the COVID-related distribution rules to pay off $40,000 in debt — should we?

Dear MarketWatch,

I’ve been contemplating taking the penalty-free COVID withdrawal from my Thrift Savings Plan retirement account. My wife and I earn roughly $180,000 a year combined and have about $190,000 in our retirement plans — $110,000 in my plan and $79,000 in her 403(b). We each contribute 15% and get our respective employer matches at 5%. We are both in our mid-40s.

My wife, who works…

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