60 years old facing impending downsizing...over $600k in IRA/401k jointly. $100k mortgage...would it make sense to pay off mortgage with 401k, taxable, but no penalty, to get through a potential rough patch of possible unemployment? Given the run-up in the market, thinking of taking gains as opposed to trying to recover from inevitable market correction...Not sure what to do...Thanks.

Terry Says:

No, it would not make sense to lose out on all future tax-deferred growth of your 40l(k).  Having to make a mortgage payment will keep you under pressure to find a new job — and that may not be so bad!  But what you SHOULD do now — before you lose your job, is make sure you have refinanced to the lowest fixed-rate mortgage possible.  That will make the burden bearable.

If you’re worried about a correction in the market, just make a more conservative choice of investments in your retirement accounts, perhaps more in a money market fund where you can’t lose money!