Ask Terry Questions Retirement with mortgage, and home upgrades?

Retirement with mortgage, and home upgrades?

By Terry Savage on September 14, 2014 | Housing / Real Estate

I am over 60 and ready to retire. I have a 150,000 mortgage and 250,000 in a 401(k). I am not quite sure what to do. I am currently self-employed and I paid 15,000 in taxes last year. I want to take out 50,000 and do upgrades on my home; however I am afraid of the taxes I will have to pay.

Terry Says:  If you’re ready to retire, you might want to have a discussion with a fee-only financial planner to get a handle on your entire financial picture before making this decision.   Just off the cuff, I’d say that despite the fact that you’re “ready” to retire at age 60, your finances may not keep up with your lifestyle!  First, you don’t want to take Social Security before your full retirement age, around 67.  Taking at the first opportunity — age 62 — would be a costly mistake.  So that leaves you 7 years of no income.  Even with $250,000 in a 40l(k) — PRETAX — (so maybe $175,000 after tax) that money could be used up quickly!

And if you take money out now to do an upgrade, you’ll lose all future growth of that money — not to mention the taxes you’d pay next year.   AND, you still have a mortgage.

This sounds like wishful thinking to me.  But you can get the specifics from a conference with a planner in your area.  Go to to find one.



a personal
finance question