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    rambo1948's Avatar
    rambo1948 Posts: 1, Reputation: 1
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    #1

    Oct 20, 2010, 09:15 AM
    I am retired at 62 and getting $1,300 a month SS.
    My wife will work 2 more years at $100,000 a year. Our monthly payment is $975 with a $125,000 balance. We have a combined 401K with $380,000. Should we pay off our mortgage by withdrawing from our 401KI ?
    joypulv's Avatar
    joypulv Posts: 21,591, Reputation: 2941
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    #2

    Oct 20, 2010, 10:20 AM
    Not enough info. Interest rate on loan, her SS amount, other savings, what you plan to do in retirement, how healthy you are, will you downsize, etc.
    I would sit down with a financial planner or book or online calculator in 2 years.
    Wondergirl's Avatar
    Wondergirl Posts: 39,354, Reputation: 5431
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    #3

    Oct 20, 2010, 10:28 AM

    NEVER withdraw from a 401(k) to pay off a mortgage. Find a well-respected CPA/financial planner. You might check into a reverse mortgage if you plan to stay in your house for the rest of your lives.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #4

    Oct 20, 2010, 10:57 AM

    I agree that it is not a good idea to use a tax-advantaged account to pay down your mortgage. One thing to consider is refinancing your mortgage - what is the interest rate on it? Paying $975/month on a $125K mortgage balance seems high, unless you have only a few more years on the mortgage and most your payment is going toward principal. If you refinance the balance on a new 30-year mortgage your monthly payment would be reduced to about $685.
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