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I will retire next April or May. I will receive cash balance pension & 401K totalling about $30-35K (my second time around with this company; retired in '98 and took the big payout). My 2nd mortgage will be about $20K at retirement. My plans are to pay it off completely with the new cash settlement.

Question: Wouldn't I be better off to roll it over into my current IRA, then take out only the $20K needed to pay off the mortgage? It seems to me taxes on $20K would be a lot less than on $35K, and I may not need the excess right away. Otherwise, I think I would face a huge 'lump sum' tax right off the bat, no?

Is my reasoning on this correct?


Ralph Miller
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