Whatever your reason is, make sure you don’t leave yourself without sufficient liquid assets.ĭo you take regular withdrawals from the IRA and use the money as part of your ordinary budget? If so, how would depleting the IRA impact your cash flow? Do those withdrawals cover an appreciable amount of your spending? This is a necessary step for making a proper choice. ( Looking for help with a financial question? This tool can help match you with potential advisors.) What Is the Immediate Impact on Your Budget and Cash Flow? My point in bringing them up is to suggest that you should first solidify for yourself why you are considering it and what you hope to achieve. These are just some examples of common reasons you may be thinking about this. They will help you understand your options and be able to guide you. If that’s part of what is driving you, talk with an advisor and attorney about planning your estate. 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 out of concern that they might not be able to keep the house. I get it – I have made decisions that weren’t strictly justifiable on a spreadsheet because they would reduce complexity for me. You’d remove two accounts with the associated payments, withdrawals and tax-filing implications of both. Are you wanting to simplify things? If so, and you can get rid of the mortgage entirely, this would certainly do that.Comparing the interest rate on your mortgage with the return you can expect on your investments – and the associated risks – will be a key element. Do you want to do whatever is going to result in the highest financial return? In that case, this is more of a math problem.The optimal choice for you depends in part on your own personal “why.” Regardless of why you are asking this question, I think you need to consider how much it could affect your cash flow as well as your flexibility to absorb unexpected expenses.Ĭonsider these questions as you consider your next move. ( Looking for help with a financial question? This tool can help match you with potential advisors.) What Is Your Goal With This Decision?Ĭonsider what made you ask this question in the first place. The best choice for you is going to depend on what the rest of your finances look like and what your ultimate goal is.
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