Posted: 2/3/2016 3:17:30 PM EDT
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Should I pay my mortgage off using my 457 Plan? 20 % penalty on $73,000 mortgage . I would have to pull $87,600 from my retirement plan to free up my monthly payment and interest. Present mortgage interest rate is 3.2%.
What am I actually trying to say and accomplish here? Here we go |
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Simply do the math. Calculate the interest you will pay on whatever the term is that is left on the $73K mortgage. Then look at what your 457 plan gains would be on $87.6K over the same amount of time based on your 457 plans historical performance. If the gains of your 457 plan over the remaining loan term are more than your remaining mortgage interest then you would be losing money by pulling that $87.6K and paying off your mortgage. I'll bet that you will find that you're better off continuing to pay off your mortgage. |
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Quoted:
Simply do the math. Calculate the interest you will pay on whatever the term is that is left on the $73K mortgage. Then look at what your 457 plan gains would be on $87.6K over the same amount of time based on your 457 plans historical performance. If the gains of your 457 plan over the remaining loan term are more than your remaining mortgage interest then you would be losing money by pulling that $87.6K and paying off your mortgage. I'll bet that you will find that you're better off continuing to pay off your mortgage. Agree this can only be done with the fixed portion of the investment the mid-cap and large cap would be impossible to estimate. I also have a $5,400 monthly net pension on top of this 457. My short fall net a month is $1,750. I like what your saying I need to make that up that short fall and I thought maybe hitting the 457 would clear me monthly even. |
