Hard decision to make. Most experts say to not do it. Should i pay my house of with my 401k?

but you could have invested the money and made far more gains. basically, you've just shoved all your money into the walls of your home and have lost any ability to use it to earn more money. i understand the psychological benefit, but financially it's a bad move. you have a certificate, huh?

GET OUT OF DEBT!

also, consider if your house is likely to appreciate or at least hold its value.


having all your money sunk into a depreciating asset - if the market is going down for a long time - is not good.


so there's that.

Re-financing is NOT cheap. Thousands will go to it. See if you can make extra payments or the like, be done with it in a couple years.

good luck whichever choice you make - congratulations on retiring!!

penalty tax is 10%. which is in addition to the normal taxes on something like that. If I could pay off a mortgage I'd prolly do it.

It has been Communist handouts that kept the stock market afloat.

Rental properties are risky depending on who you rent to. Maybe buying something that you don’t really care about if the renters tear it up.

Once upon a time, I had a 401K along with a high pay corp job. Entire division got laid off when I was 52 yrs old. No one hiring in my field.

Retired. Bought a company. Scammed by the Sellers (hell, the BANK was in on it), spent the 401K, went BK, lost everything.

Bought a company in deep doo doo for ZERO. Worked 14 hrs/day X 365 for 8 years.

Had a couple of good years.

Bought a small farm with old house for CASH. First time in my life that I paid cash.

Now, SECURITY. Have big gardens, chickens, ducks, geese, milk cows, and fish in the pond.

I prefer security in land and food to cash in the mattress or stocks.

The markets are manipulated to profit the insiders. I used to teach Security Analysis (stocks, bonds, warrants, etc.), so I think I know a bit about that. It is hard for the little guy to make a profit in the markets.

Put your money into something you directly control.

Just have enough to covers the taxes.

I would have 3x times the money in my 401k if I would have been paying my house payment into a savings account.
And It fucks the parasite banks.

the safest thing to do is withdraw all your money
and stuff it in your mattress.

Don't withdraw your 401k money. Just reallocate it into a stable value fund. Each 401k firm has a "safe haven" fund which doesn't earn a high percentage profit, but also does not lose money when the stock market goes down. For Vanguard it is the Vanguard Retirement Savings Trust II fund. For Principal, it is the Principal Stable Value Z Class fund. Figure out what that fund is that your 401k firm offers and then move all of your money into it until you're feeling confident about the stock market again. That's how all of my 401k money was allocated back in March during the crash. My 401k account didn't lose a dime.

At this point you're paying almost all principal with your payment, very little interest.

If you think of it as you're actually "saving" money because you're paying almost all principal...your net worth goes up every month by the amount of principal you paid that month.

I'd simply wait the four years and pay the mortgage off per schedule. You will, obviously, still be paying $200 per month in "rent" in the form of your property taxes.

I'm guessing you've got a decent pension? Meaning you don't have to necessarily draw on the money in the 401(k) at this point.

If it were me? I'd roll that into an IRA with a, and this is important, a fiduciary wealth adviser. One who does NOT get paid when they sell you things, they get a fee, a percentage on your account for managing it.

You can always put it in high quality corporate bonds, for example, which will at least keep you away from the effects of inflation.

Think of the 80,000 as your "powder". Keep it dry, but don't put it in paying off the mortgage or you'll have that much less "powder" if you ever need it.

Last Edited by Larry D. Croc on 07/03/2020 09:13 AM

Exactly
The markets are full of shysters and scam artists looking to take you for a ride.

The tax and 10% penalty say NO!

I think the dollar may crash before the stock market.

The stock market has become impervious to reality.

taxes also rule every financial move we make. The higher your tax bracket, the more you have to earn to pay on a mortgage.

Thanks. Good points

The stock market will go into freefall when the fed stops handing out welfare checks to the bankers.

That's right. And this next crash is going to be more severe than 2001 and 2008 were. First the market will go up huge, and then repeat the same pattern of gold 2011, bitcoin 2018, and Dow 1930. The play is a defensive 401k. Sideline your money. If you can anticipate the event, play the collapse.

In 2008, when everyone was underwater with their mortgages, some people walked away, some short sold their homes. That's the time to buy if you have your funds sidelined and unaffected by the drop. I knew one that short sold their home back to themselves. The lenders allowed it. Walked away with a tremendous deal.

Placing money into a paid off home is financial peace of mind, but it ties up your funds and prevents you from taking advantage of certain significant opportunities. The value of the home will reflect and adjust according to the economic situation, but at least you still have a roof over your head.

Approx. what is the principal amount remaining on the mortgage?

50 thousand

If for no other reason:

..."Experts say not to do it"...

Remember,, it was the "experts" that shut down the world
over a fake plandemic.

Put your money into something real.

The money is as fake as the scamdemic. Use it while you can.

The question is how do you feel about having debt/mortgage? Does it give you anxiety? Sleepless nights? No sense of calm?

If it makes you feel better to have no debt then there is your answer. Most people are so saddled with debt and mortgage, they see no way out.

My advice is to be debt free whenever possible.

Never spend more than you make.

yes do it

The distribution can be taxed as income spread evenly over tax years 2020, 2021 and 2022. However, if you want to pay back the amount you took out within three years, you can claim a refund on those taxes.

CARES Act removed the early withdrawal penalty until the end of the year.

Pull out any amount you want and just pay regular taxes, no 10% hit.

What option will make you sleep better at night? The "experts" wont be making any money off your 401K if you cash it in...

and can spread the tax under the cares act for 3 years.
It is a no brainer do it

Debt enforcement will be deemed racist and meaningless in another year. In case you missed it, law enforcement in democratic ran areas are practicing selective enforcement in regard to physical protection. You think they're going to enforce debt liens!

You can always make an extra mortgage payment every year. I did that and paid off 15 year in 12-1/2 once I started doing it. Make 13 payments instead of 12 each year.

Call Dave Ramsey, good question for him.