[garofoli]

I am looking at purchasing our dream house. My current home is a "postage stamp" with only one bath and is 17 years old. We have ~5 years left on current home loan and our house is in immaculate condition but will need many updates within the next 5 years. Our dream house will require us to go with a 30 year mortgage and I plan on working 15 more years. I consider the price for the home to be a great deal and I think I could get ~ $40,000 more for it whenever (if) I ever want to sell it. With the current interest rates so low and knowing that I am very secure with my job with no fear in my company ever going under. (it is a Nuclear Power plant job with 20+ years left)
My questions are as follows:
1) Should I pay off the home off with my 401K when I retire? ( current Property taxes are $8000)
2) Should I pay off the home with my lump sum retirement?
3) do you have any other advice?

[jakester]

garofoli -

Your scenario is probably one that many people would love to be in. To be 5 years away from paying off your home is a tremendous accomplishment but it doesn't sound as if you are all that thrilled to be in this place.

To put it in context, you have 5 years to go before paying off your mortgage. You are thinking of buying a new home and in essence, starting all over again. When you retire, if you start pulling out money from your 401k, you have to consider what the regulations are in terms of how much money you are allowed to pull out in a given tax year. If you are planning on using your 401k to pay off your new home, how will that impact your future living conditions in terms of what you will have left over in your retirement account? When you are retired, you aren't drawing any income besides your 401k (unless you have a pension), so do you want to be living just to pay your mortgage payment? What else do you plan on doing in life after retirement?

I'm not really giving you answers as much as I am trying to provoke more thoughtful questions regarding your twilight years.