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Old 05-03-2015, 03:05 PM
 
2,292 posts, read 1,558,471 times
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Quote:
Originally Posted by lancers View Post
Pay 10 to save 5? I would not take money out of a retirement account. Just try to pay down what you can every month no matter how small of an amount.
You misunderstood. Paying off a mortgage makes little sense in a low interest rate environment when you can use the extra money to invest or at least have liquidity and flexibility by not paying off a big mortgage.
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Old 05-03-2015, 03:15 PM
 
Location: RVA
2,164 posts, read 1,264,175 times
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Quote:
Originally Posted by Petunia 100 View Post
That's for a 100k mortgage. For all we know, the mortgage was 500k when it originated.
That doesnt matter. In fact, if it is worth $500k, all the better. He can refinance 100k for 30 years and then pay down when things improve. Point is rates are at an all time low still, so anyone with a high rate and only 100k left on a house shouldnt pay more than that. Now if hes upside down, fuggedaboutit!
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Old 05-04-2015, 04:23 AM
 
Location: Durham NC
1,189 posts, read 1,295,407 times
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Quote:
Originally Posted by Burkmere View Post
You misunderstood. Paying off a mortgage makes little sense in a low interest rate environment when you can use the extra money to invest or at least have liquidity and flexibility by not paying off a big mortgage.
No I understood and while I think there will be a lot of money made over the next few years in the market there is no guarantee. No mortgage debt is better than not owning outright. If you are cutting it so close that you can't afford to make extra principal payments monthly then you are overextended.
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Old 05-04-2015, 04:45 AM
 
Location: Central Massachusetts
4,800 posts, read 4,842,106 times
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Quote:
Originally Posted by lancers View Post
No I understood and while I think there will be a lot of money made over the next few years in the market there is no guarantee. No mortgage debt is better than not owning outright. If you are cutting it so close that you can't afford to make extra principal payments monthly then you are overextended.

You are right but in the case of the OP it makes little sense. OP is not retirement age and would pay a hefty penalty and taxes on the money. What would remain is not enough to pay off the mortgage.
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Old 05-04-2015, 06:39 AM
 
Location: San Antonio
7,629 posts, read 14,374,443 times
Reputation: 18706
Quote:
Originally Posted by Petunia 100 View Post
I think it is a huge mistake. You will not be debt-free, you will owe the IRS big time when next April 15 rolls around. Possibly your state too, if you live in a state with income tax. When that is finally paid off, you will not have much time left to save some money for retirement.

You'd be better off to stop contributing new money to your retirement accounts than you will be to cash them in. You still have 100k growing and compounding for you, and that is huge. Don't throw that away.

Instead, focus on your budget. How much can you divert to your mortgage each month? Do you have spending "leaks", expenses which can be reduced or even eliminated? Focus on how your 100k is invested. Do you have a reasonable asset allocation plan, and are you watching your costs?
AMEN to the above!!! Your tax base AND penalty for not being 59 1/2 before withdrawl would leave you with a FRACTION of your $100K balance. You would probably owe in the neighborhood of 35% in taxes/penalty on the FEDERAL level alone, without regard to any possible state tax owed.. If you use the money you are putting in (as stated above) you would see 100% of THAT money go to pay down the mortgage.
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Old 05-04-2015, 08:55 AM
 
Location: Chicago area
14,364 posts, read 7,911,249 times
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I have to agree with NOT touching your 401k. At 49 you are already way behind the 8 ball and need to do some serious planning lest you won't be ready to retire until you're in your 70's. Finding a way to cut your monthly expenses is good advice. Either sell the house and find a place that keeps you living below your means or find a room mate or two. Have you consulted with a good financial planner?
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Old 05-04-2015, 09:08 AM
 
8,181 posts, read 11,902,987 times
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Quote:
Originally Posted by newenglandgirl View Post
I regularly take all the pocket and jar change and put it in the paper coin holders....
Just as an aside, I was told years ago by both Bank of America and Chase that they prefer depositors to bring in their coins unrolled. I was provided with a clear plastic bag/container for that purpose. The bank(s) would then use their coin-counting machine and the appropriate line entry would be made to my account(s). I would surmise that other banks operate in a similar fashion.
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Old 05-04-2015, 02:22 PM
 
Location: Eastern Washington
14,217 posts, read 44,878,144 times
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Quote:
Originally Posted by frgg View Post
Hello everyone:

I'm 49 years old and I count with about $100k on a retirement plan, but also I owe about $96k for the mortgage of my house, I was planning to cash out our money from the retirement plan to ease the monthly payments and at the same time to start saving for the future little by little to replenish the money we used for the mortgage which by the way I never been able to save for any 401k programs because the tight of the economy; so as I said this is my chance to pay off my house and start fresh with no house payments, so my questions to all of you is to advise me if I'm doing the right thing or maybe a mistake using our money this way...I need your help please.

FRGG

I have to agree with most if not all that using your retirement to pay off your mortgage would likely be a mistake. Given that you are new to this forum, you might want to post up again and explain to us a little more about your situation, what you have going on with the house, job, etc. I "know" most of the frequent posters and so know their overall financial situation, and would frame any answers to their questions in that context.

What I mean is things like if you are married or single, divorced, kids at home or not, what general region you are in, work or retired, plans for the immediate future, etc. Also about the house, condition, cost basis, current value, etc.

Particularly why you don't participate in the 401k, which IMHO is the "Queen of Benefits", it allows you to build up tax deferred and sometimes you get an employer match. Not making sense to me that you don't partake.

Welcome to the forums in any case!
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Old 05-04-2015, 02:43 PM
 
Location: Durham NC
1,189 posts, read 1,295,407 times
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Quote:
Originally Posted by golfingduo View Post
You are right but in the case of the OP it makes little sense. OP is not retirement age and would pay a hefty penalty and taxes on the money. What would remain is not enough to pay off the mortgage.
I said in an earlier post that OP should not take any money out of his retirement accounts to make mortgage payments.
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Old 05-04-2015, 05:25 PM
 
2,292 posts, read 1,558,471 times
Reputation: 2737
Quote:
Originally Posted by lancers View Post
No I understood and while I think there will be a lot of money made over the next few years in the market there is no guarantee. No mortgage debt is better than not owning outright. If you are cutting it so close that you can't afford to make extra principal payments monthly then you are overextended.
Totally disagree. Unless you want to have no liquidity or flexibility and lose money by paying off basically free money. If you want that, then you are correct.
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