Q. Should I use some of my 401(k) to pay off a mortgage, but carry short term debt into retirement?

I really like the idea of being debt free in retirement.  The elimination of the debts will reduce the amount of available cash you’ll need each month, extending the life of your retirement stash.  However, the strategy to pay off debt must be personalized to your situation!

I’d recommend working a bit longer to eliminate the short-term debt and make more progress on your mortgage.  If you’d still like to use your 401k to pay off a mortgage, consider spreading the pay off over several years to reduce the taxes due on the withdrawal.

Enjoy your retirement!  Please feel free to follow up with me if you’d like to discuss the specifics of your situation.

Good luck!!


John is a CPA and personal finance coach.  Email your questions to john@60minutefinance.com.

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If you need confidential financial coaching for your particular situation, please contact John for a no-cost, no-obligation discussion of your needs.

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