Ask Experts Questions for FREE Help !
Ask
    datdudeb's Avatar
    datdudeb Posts: 1, Reputation: 1
    New Member
    		  
    #1

    May 28, 2007, 07:33 PM
    Home payoff with 401k
    How is everyone?
    My question is I have enough in my 401k to pay off my home that I just purchased. I'M 40 yrs old. It will empty out my account ,but, I guess I'm looking at the freedom of no mortgage payments. Any advice.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
    		  
    #2

    May 30, 2007, 02:53 PM
    Don't do it. You will owe income taxes and penalties on the withdrawal from your IRA, so figure on only half of your account being available to pay off the mortgage. You are better off paying the mortgage, deducting the interest payments from your taxes, and continuing to have the 401(K) grow tax-free until your retirement. This would also leave you with little for retirement - you'd be "house poor," which is a very inflexible place to be. You're better off having, say $100K in your 401(k) and a $50K mortgage than having no 401(k) and no mortgage.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Payoff home loan vs Invest [ 9 Answers ]

Hi, I am at point where I have enough money saved so I can payoff my house mortgage which is 15 year @ 5.5 (12 years left) but I am not sure either to payoff the loan or invest somewhere else to make more than 5%. Please advice Thanks

What happens if home can't or doesn't bring payoff? [ 1 Answers ]

I have a scenario here that I have questions about. Let's say you have a home that has a first mortgage balance of $182,000.00 and a home equity line/second balance of $65,000.00 for a total lien of $247,000.00. The realestate appriasal is $285,000.00. This leaves $38,000.00 in equity available on...

Loan Payoff at 401k rollover [ 1 Answers ]

NOT HAPPY HERE! Here's the deal. Example is for clarity. Total 401K is $100,000.00 Outstanding loan is $15,000.00 That's it, now I lost my job of 30 years.

Loan Payoff at 401k rollover [ 1 Answers ]

Our plan administrates paid off an existing loan in my 401K before it was rolled over to an IRA. As of today feb 2, I have not received a 1099R. All other withdrawals from the rollover IRA I have received the 1099R's. QUESTION IS: Should I receive a 1099R for the loan payoff also. THANKS ...

401k home loan default [ 3 Answers ]

My wife took out a loan two years ago from her 401k. This was a first time withdrawal for the purpose of a home loan. She is now interviewing with another company. (Better commute, new faces) Given that her loan becomes callable when she leaves, if she defaults, is there the 10% withdrawal...

View more questions Search