Posted on: 31st Jan, 2007 05:24 am
i owe 40,000 on my mortgage, and want to pay it off. i am retired and on just social security as income. i have 250,000 in ira's. would it be wise for me to withdraw 40,000 from my ira and payoff my mortgage or borrow from the ira to pay it off?
Swayhacker, in my opinion withdrawal from the account will be a better option as you are aged more than 59 ½ now and will not face any penalty for the withdrawal.
If your main goal is to pay off your mortgage then by all means do so. Keep in mind that doing so will no longer give you any tax benefits afforded by have a mortgage. You need to consider your age and the properties value. If you are worried because your mortgage payment is more than you would like in relation to your income, then why not refinance to lower your payment and still reep the tax benefits. You have a good nest egg with your $250k in your IRA. If you owe $40k on a home work $500k.. you can always use your equity to supplement your retirement income.
Ren I think taking out a reverse mortgage can be another option swayhacker can utilize. What do you think?
Definitely..... although I am not very familiar with them, I do see benefits there.
Hi Rem,
Welcome to the forum.
I think it is better to refinance at a lower rate and still get the tax benefits from the loan. Taking out money from the IRA can be penalty-free but why use your retirement money? I personally feel that in your situation, withdrawing money from IRS or even taking out a loan will not be that useful as going for a refinance, provided you get a lower rate.
Although there are closing costs involved in a refinance, yet these can be paid off by your savings or by withdrawing a small amount of money from the IRA. But then this will be better choice compared to taking out $40,000 from the IRA.
No doubt that a mortgage payoff is necessary but then at the same time keeping retirement money intact is also important.
Hope this is going to help you.
God bless you.
Samantha
Welcome to the forum.
I think it is better to refinance at a lower rate and still get the tax benefits from the loan. Taking out money from the IRA can be penalty-free but why use your retirement money? I personally feel that in your situation, withdrawing money from IRS or even taking out a loan will not be that useful as going for a refinance, provided you get a lower rate.
Although there are closing costs involved in a refinance, yet these can be paid off by your savings or by withdrawing a small amount of money from the IRA. But then this will be better choice compared to taking out $40,000 from the IRA.
No doubt that a mortgage payoff is necessary but then at the same time keeping retirement money intact is also important.
Hope this is going to help you.
God bless you.
Samantha
