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I just received $90,000 from an insurance policy. I now have enough to pay off my house which is worth roughly $300,000, but most of my savings would be depleted.

You have gotten lots of good, but sometimes contradictory advice. By coincidence, Suze Ormand has an article about this here:

She says pay it off. I agree, but keep on making "house payments" into a mutual fund, and do it every month. I like Vanguard or Fidelity, but there are other good ones.

Slightly OT, I am having the same argument with myself. I am still working, and I don't want to take any gains this year. Above all, I don't want to touch an IRA or 401K until I retire, all because of the tax hit involved. For the moment I throw all looose change at the mortgage. When I retire (next year), I will liquidate a variable annuity and use it to knock down the mortgage. Only about half of the annuity will be taxable. I don't want to take the tax hit this year, as it will throw us into a higher bracket.

I will start to liquidate non-tax sheltered assets for living expenses, but on advice of my CPA, I will start to use my IRA accounts, at least liquidate them to convert to Roth IRA's. She says until age 71½ we will be in a "tax holiday" and we should reduce our conventional IRA's and 401K's as much as we can without tilting the tax scale too heavily. I would appreciate the thoughts of this august group, as well.

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