I’m 81 With $118k Left on My Mortgage. Should I Cash Out My $110k IRA to Pay It Off?

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Ask the consultant. I am 81 years old with a mortgage of $118k and an IRA worth $110k.Should I withdraw from my investments to pay off my mortgage?
Ask the consultant. I am 81 with a mortgage of $118k and an IRA worth $110k.Should I withdraw from my investments to pay off my mortgage?

I am 81 years old. I have a mortgage balance of $118,300. I also have an individual retirement account (IRA) of $110,000 invested. Should I withdraw the money from my investment and put the money down the mortgage?

– Octavio

The best choice for you will depend on what the rest of your finances are like and what your ultimate goal is.Regardless of why you’re asking this question, I think you should consider how much it might affect your cash flow. on as well as your flexibility to absorb unexpected costs.

Consider these questions as you consider your next move.Looking for help with finance?This tool can help match you with potential advisors.)

What is your goal with this decision?

Ask the consultant. I am 81 years old with a mortgage of $118k and an IRA worth $110k.Should I withdraw from my investments to pay off my mortgage?
Ask the consultant. I am 81 years old with a mortgage of $118k and an IRA worth $110k.Should I withdraw from my investments to pay off my mortgage?

Think about what made you ask this question in the first place.The optimal choice for you depends in part on your personal “why.”

  • Do you want to do what will lead to the highest financial return? In that case, this is more of a math problem. Comparing your mortgage rate to your expected return on investment and the risks involved will be a key element.

  • Want to simplify things? If so, and you can get rid of the mortgage entirely, this will certainly do it. You’d get rid of two accounts, with both payments, withdrawals, and tax filing implications. I made decisions that weren’t strictly justified on the table because they would reduce the complexity for me.

  • Do you have concerns about your heirs? I’ve had conversations with retirees who didn’t want to leave their beneficiaries with an unpaid mortgage. If that’s part of what drives you, talk to an advisor and attorney about your estate planning. They’ll help you understand yours options and will be able to guide you.

These are just a few examples of common reasons you can think of. My point in bringing them up is to suggest that you first establish why you are thinking this and what you hope to achieve. This is a necessary step to make a choice. (Looking for help with finance?This tool can help match you with potential advisors.)

What is the immediate impact on your budget and cash flow?

Ask the consultant. I am 81 with a mortgage of $118k and an IRA worth $110k.Should I withdraw from my investments to pay off my mortgage?
Ask the consultant. I am 81 years old with a mortgage of $118k and an IRA worth $110k.Should I withdraw from my investments to pay off my mortgage?

Whatever your reason, make sure you don’t leave yourself without enough size liquid assets.

Do you take money out of your IRA regularly and use the money as part of your regular budget?

 
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