If you are swimming in debt, you are not alone.

Financial analyst and adviser Ken Frenke shares helpful advice on paying off debt and managing our resources in a way that honors God.

We tackled an important question about debt from a listener:

“If you have credit card debt at about 20,000 and you are age 60, are you better off taking out of a retirement account or investment account and paying it off or keeping the debt?” –Anna

Ken provides helpful advice for those who are nearing retirement,

“I would generally say at age 50, you still have a number of years until retirement. In principle, I’d want to pay off the debt; you’re not going to get ahead if you’re getting 4, 5 or 6% in an investment portfolio and you’re paying 16, 18, 19 % in debt on that money. At age 60, the same principle stands just later on in the process…so you may want to more quickly pay that down.”

Should we borrow money from a retirement account to pay off debt?

“If your retirement plan allows you to borrow money and that’s favorable to do that, that may be a better way to do it if you are in a situation with your personal investments that would require you to sell something that you’re not ready to sell now.

“You can take it from your retirement account as long as you can then pay that back with your investments, which might be the lowest cost way to do it depending on the taxes incurred when you have to sell something on the investment side.”

We don’t have to take care of all of our debt at once; it can be done in baby steps.

“I would take baby steps every year; I would do something and try to have it all paid off by the time you hit 65 when you go on Medicare, and maybe 67 when you’re on Social Security.

“My inclination is to take baby steps always; see how it feels, see how it works for you, and try to be out of debt by the time you’re retiring.”

Ken adds that this is a time where fear and faith really compete with one another, but that they can’t coexist. He points us towards God’s promises in Isaiah 26:3,

“The number one thing for all of us to keep in mind is something from Isaiah 26:3, where it promises to keep in perfect peace, him, whose mind is stayed on God. If you keep your mind centered on God, you will not only willingly but you will more readily apply His principles to your finances and all the areas of your lives, and you’ll reap the reward of that.”

Highlight: Paying off debt

Principles of Christian stewardship

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