No. of Recommendations: 1
Assuming you are over age 59-1/2, once you leave the company you should be able to take the $20K directly from your 401K or your IRA without paying the penalty but with paying income taxes. You will only pay income taxes on the money you take out of the plans. So a rollover to an IRA for the rest of the funds will save you income taxes on them.

Note that your tax rate next year could be quite high from the time you have worked. If you waited to pay off the mortage until the next tax year, your income that year could be a lot lower so maybe your tax rate would be lower too. Check it out before you decide.
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement