DEAR HARRY: I am 54 and my wife is 56. Together we earn about $80,000 a year. Our only saving consists of my 401(k) plan with about $135,000 in it. We have 11 years left on a 7 percent mortgage with a balance of $180,000 still due. Our problem is that we owe $60,000 in credit-card debt. I have tried to refinance the mortgage, but my credit score is so low that I was denied. Should I take enough from my 401(k) to pay off those card debts? Please help, because this situation is putting a strain on my marriage.

WHAT HARRY SAYS: You must know that you are living beyond your means. Moreover, unless your 401(k) contributions are partially matched by your employer, the money you put into it should have gone to pay those debts. But that's in the past. Taking money from the 401(k) gets you hit for the regular income tax plus a stiff penalty because of your age. There is an alternative, before you take this road. Try several different banks to see if you can get a home-equity loan to get those card debts to zero. The interest rates are far lower than you're now paying. If that fails, I suggest that you take the hit on the 401(k) distribution. I think it's worth the jolt to get you on the straight and narrow. I know you must have seen me repeat this many times: Hereafter, never use a credit card unless you are able to pay the balance in full each month. No exceptions.

Email Harry Gross at harrygrossDN@gmail.com or write to him at the Daily News, 801 Market St., Philadelphia, PA 19107.