Comments on: Should I Use My 401k To Pay Off My Mortgage?

By: Tessoto

Tessoto — Tue, 08 May 2012 02:01:00 +0000

my mortage has balloned and i cant find anyone to refinance the loan….. TD Bank is threatening forclosure. I am 66 and have over one million in 401k… mortage payoff is 700,000. should i payoff this mortage? even though i will pay 35% income tax on the 401k money?

By: Janet

Janet — Thu, 29 Mar 2012 05:13:00 +0000

Hi Kevin, My husband and I did the same thing that you are contemplating, and are glad we did, and are about to do it again. We borrowed from our 401K to pay off credit cards, and it saved us a bundle in interest, and we actually were earning 9%, paying ourselves back at that time when the crash happened! Now that our 401K balance has been replenished, our home has lost value, so we are looking to refinance. We need to knock out a small second mortgage because our loan to value is high. in a 1.5 years, when my husband turns 59 1/2, since it seems that we won’t be penalized 10%, if I understand it correctly. I agree with the first blog -peace of mind is truly “priceless”, especially when 401K ISN’T REAL MONEY, it’s potential money that could lose value in a day. As the greatest generation used to say, “A bird in the hand is worth two in the bush!” My Dad and Mom had good sense & still do! We could learn from them still! The Depression was partly caused by people borrowing to invested in the stock market. Paying off real bills with real money seems like the right thing to do! Best to you!

By: Bud

Bud — Sun, 18 Mar 2012 02:45:00 +0000

First congratulations on having a million dollars in your 401k plan. Your truly one of the 1% percent of people who will ever do that. It’s obvious you were or are in an outstanding company Now let me start by saying I’m no investment advisor. Your question is best left to a professional. Let me start by saying that among the retired people in America the biggest expense they have is their home. Thats right most retired folks spend more money on housing than anything else. Medical bills come in second. My gut reaction is to say pay off your home. But I see other view points as well. Is your 401k your only source of retirement funds or do you have a company pension or other investments? How much longer do you plan to work? Do you plan on retiring soon or a few years from now? Finally cost of living has to be figured in as well. What’s it going to take you and your family to live on for the rest of your life? Remember if you don’t pay off your home you have to keep making those mortgage payments.. I mean a million dollars in some parts of the world is less valuable than it is in other parts of the world. Hear is a simple example. The cost of living is much higher in California than it is in Iowa! A million dollars will let you live very well in Iowa but in California a million dollars buys less. So talk to a professional but realize that nothing in the stock market is guaranteed. You should be fine if you invest smart. I mean if you have a million dollars in your 401k plan those funds should be in a less vilotile and safe segment of the 401k. Again please don’t take the advice of anyone on this board. Go to a professional. Good Day, Joe.

By: Bud

Bud — Sun, 18 Mar 2012 02:30:00 +0000

test

By: Hank

Hank — Mon, 20 Feb 2012 16:09:10 +0000

Would love to if I wasn’t 100k underwater now!

By: Joey389

Joey389 — Sat, 18 Feb 2012 15:38:00 +0000

How about seling your home and moving in to a much cheaper mortgage? Just a suggestion.

By: John W Clarke

John W Clarke — Tue, 31 Jan 2012 21:36:00 +0000

If the government really wanted to help the middle class. They would allow you to borrow from your IRA or 401K to pay off a first mortgage. Thier should be no tax or penalty from this transaction if you are 59 and a half or older. This would allow you to pay a much lower interest rate that would be returned to you. If the past 10 years are any indication of future returs on your investments you will be way ahead of the game. In the past 10 years the average investor has made no money or lost money on his investments. Because this is a win situation for the middle class our politians would never let this happen. As a wise man said ” the middle class AKA the working class always pays the freight.
John

By: Eimesor1

Eimesor1 — Fri, 13 Jan 2012 15:24:00 +0000

first of all it’s all about peace of mind. your 401k money is not guarrenteed to be there the market could turn that million into 250k just when you are getting ready to retire. If you don’t believe it ask the million people who thought they only had one or 2 years till retirement in 2008. These people are still working hard. The only thing you can count on is the peace of mind of owning a house free and clear. Then if you have extra you add it to your 401k and a roth ira

By: 401k withdrawal calculator | 401k Withdrawal Calculator

401k withdrawal calculator | 401k Withdrawal Calculator — Sat, 07 Jan 2012 00:17:29 +0000

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By: GreedyPoliticians

GreedyPoliticians — Sun, 13 Nov 2011 16:14:00 +0000

A few other items to consider: imagine what the tax rate/% is going to be when you retire, as baby boomers retire they will continue to take their money out of the market causing a downward trend. The younger generations are consistently unemployed/underemployed, thus they are not financially able to contribute to their 401k’s. This also will cause a downward trend in the market. Do you know what fees you are paying banks and advisors to invest your own money? Wall Street is loaded with greed and corruption, the only person you can trust with your hard earned money is yourself! Pay off your mortgage and have piece of mind.