Refinancing my mortgage vs withdrawing large sum from my IRA
Hi Terry –
I’m a widow and years ago my husband and I set designated money (in our IRA) for our daughter’s wedding (if that should happen). It is happening. I still live in our house that will require some repairs and remodeling. My mortgage will be paid off in 2025. I’m thinking about refinancing (15 year refinance) and getting about $80k – $20k for wedding and $60k for repairs and remodeling. I’m afraid that taking such a large amount from my 401 K will put me into a higher tax bracket and increase my Medicare payments. I am 70 and working part-time. Any advice?
Terry Says
Do not do either. Explain to your daughter that your plans with your late husband did not include you becoming a widow before she marries. Let her know that she will inherit “what’s left” after you die. But a 70 year old widow should not, cannot refinance her home and create that kind of mortgage obligation.
You –and your daughter — are living in a dream world. If you’re ready to sell your home (instead of repairing and remodeling) and move into a senior living community, put the money in the bank and use it to pay your expenses for the next 20 years! I guarantee you’ll need it. And she will be raising her children and won’t be able to help you at that point.
Doing this is NOT what your late husband would want. He would want you to be secure first.
I think it’s time for you to get some independent and trusted financial counseling from someone who is not trying to sell you anything. Please read this: https://www.terrysavage.com/pam-krueger-wealthramp/
