I am 55 years old and my wife is 60 years old. I took early retirement last year from a 28 year career and am now working for the government in a job that is paying me 75K annually. I am receiving a pension of $1435 a month from my former employer. Between my wife and me with her pension, we are currently earning around 100K a year. Since I am under 59 1/2, I am going to pay a tax penalty on my pension earnings. I plan to work in my current job for 5 years and then really retire. We are looking at the possible purchase of a piece of land on the Maine coast which is selling for around 200K. We have approx 150K in investments and around 40K in saving that we are looking to invest. We also own our house worth 330K and we have 230K in equity. To purchase the land we could give a down payment of 50K and get a home equity loan for 150K. I could pay off the home equity loan from my monthly pension check and therefore the interest would assumedly be tax deductible, helping to offset some of the tax penalties. After 5 years we would sell our house which assumedly will be worth more and pay off the mortage and home equity loan. We would then hopefully be in good position to build a dwelling on the Maine property. We are told that the property at that part of the Maine coast is appreciating at better than 15% a year. I am figuring that at the end of 5 years, if we are not in position to build on the land, we could sell it at a profit and purchase a cheaper lot somewhere else. Is my thinking sound, and would this be a good move?