Pay off home equity loan
We are in our early 70’s and both have a required distribution from our 401k’s of about $10,000 each. Our home equity loan is about $60,000 at about 8% interest. Should we take an extra $20,000 each to pay off this loan?
Thanks, Terry.
Terry Says
Well, it’s hard to advise without knowing your full situation. One thing comes to mind: if you withdraw too much and have other income, your SS benefits will be taxed, and you could face an increase in Medicare Part B premiums (called the IRMAA adjustment). So please consult your tax advisor. And be sure they withhold about 25% from your RMD for taxes. After that, if you don’t need the money definitely pay down that 8% loan.
