Ask Terry Questions 401k vs Equity in home

401k vs Equity in home

By Terry Savage on June 01, 2024 | Credit/Debt

Teri, I listen to you every week and Wgn try to retain as much as I can while I drive. Almost every week you pretty much tell everybody to leave their 401(k) alone. It’s growing right now. Don’t take the money you pay all this interest bad idea the reason I’m asking is my wife and I can rarely agree on things, and we have a little bit of debt that we would like to pay off and I keep telling her we need to just take the equity out of the house paid a little bit of debt we need to pay and then pay it back at user point that it’s better to take the 401(k) Maybe I’m missing something. Can you please solve this problem? Both of us still work I am 62. She is 57 and we probably have a little over a couple hundred thousand in equity in our home May fact I know for a fact we have two and 250 in equity , please help me solve this problem Lol FYI, I love my wife. I’ve been with her for 30 years but when it comes to the tough decisions in life, we are not good at it.


Terry Says

The reason you are not getting to a good solution is because NEITHER of you has the correct answer!!! (I hope this response saves your marriage.  Now let me save your retirement!)

What you need to do is take more out of your current earnings and PAY DOWN YOUR DEBT now — before retirement!  Or earn a bit more.

Don’t eat into your home equity and don’t take money out of your 40lk.  (You might want to invest more conservatively inside your 40lk at this point — but you don’t want to take the money OUT!)

Glad you’re both still working. Here’s the plan:

Take a look at the card with the highest interest rate.  Write down this month’s MINIMUM monthly payment.  Double that amount and write it down. 

Pay that same amount every month (not double the new minimum) but that original figure.  Don’t charge another penny. The  card will be paid off in less than 3 years — when you’re about ready to retire!

Do this with one or more of the cards and then follow with the rest.  In three years you’ll be out of debt — and have a nice retirement account and even more home equity!



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