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mortgages

Q&A: Rob Peter to pay … off the mortgage?

November 4, 2024 By Liz Weston

Dear Liz: Would it make sense to pay off a low-balance, refinanced mortgage at 3% using a portion of my wife’s 401(k)? Would that not be better than paying the mortgage off from my IRA? I am 70 and on Social Security. My wife still works, at least till her birthday in December. She will then be 70 as well and should qualify to maximize her Social Security payout.

Answer: It’s not clear how a withdrawal from one account would be “better” than the other, given your similar ages and the fact that either withdrawal would be taxable as income. The more appropriate question might be why you’re in such a rush to pay off this mortgage.

At this point, you’ve paid most of the interest on this loan and your payments are largely principal, so you won’t save much by paying the loan off early. If there’s a compelling reason to do so, then you may want to postpone the withdrawal until your wife retires and you’ll presumably be in a lower tax bracket. A tax pro can help with that projection.

You should be consulting a tax pro in any case, since required minimum withdrawals from most retirement accounts have to start at age 73 and you may need help managing that tax bill.

Filed Under: Mortgages, Q&A, Taxes Tagged With: mortgages, retirement plan withdrawals, retirement savings vs mortgage payoff

This week’s money news

September 17, 2024 By Liz Weston

This week’s top story: The busiest travel days around Thanksgiving. In other news: 4 social media money trends worth knowing about, what happens when the Fed finally cuts rates, and weekly mortgage rates drop.

The Busiest Travel Days Around Thanksgiving
If you can avoid traveling the Sunday after Thanksgiving, you’ll avoid the worst of the Thanksgiving travel crowds.

4 Social Media Money Trends Worth Knowing About
Here, we’re tackling four of the latter set, laying out what you need to know about these trends, how they could benefit you and some potential downsides.

What Happens When the Fed Finally Cuts Rates?
NerdWallet writers spell out what an expected rate cut will mean for mortgages, savings accounts and more.

Weekly Mortgage Rates Drop, Creating Opportunities for Refinancers
If you’ve been waiting for rates to fall in order to refinance, your wait might already be over.

Filed Under: Liz's Blog Tagged With: money trends, mortgages, Thanksgiving

This week’s money news

April 17, 2024 By Liz Weston

This week’s top story: What student loan borrowers should know if MOHELA is your servicer. In other news: Pregnant workers must get time off for birth, abortion, what not to do during mortgage preapproval, and 5 questions to ask when helping an older parent with money.

MOHELA Senate Hearing: What Student Loan Borrowers Should Know
If MOHELA is your servicer, you’ll continue to make student loan payments as usual. But in the long run, lawmakers could step up scrutiny of MOHELA and other federal servicers.

New Rules: Pregnant Workers Must Get Time Off for Birth, Abortion
Regulations under the Pregnant Workers Fairness Act include time off for childbirth, abortion, miscarriages and more.

What Not to Do During Mortgage Preapproval
You could hurt your home loan application by taking on new debts, changing jobs or otherwise calling your financial stability into question.

5 Questions to Ask When Helping an Older Parent With Money
Credit still matters as we age. Here’s how you can help parents or other older adults check in on theirs.

Filed Under: Liz's Blog Tagged With: aging parents, mortgages, Student Loans

Wednesday’s need-to-know money news

July 27, 2022 By Liz Weston

Today’s top story: Fed raises target rate again. Also in the news: How big wheels cost you big bucks at the pump, how to cope with Airbnb cleaning fees, and how airline prices are going up in more ways than one.

Fed Raises Target Rate Again, but Mortgage Rates Are Unfazed
Each Federal Reserve announcement has resulted in a less dramatic change in mortgage rates than the one before.

How Big Wheels Cost You Big Time at the Pump
Big wheels and tires can add pizazz to your car, but they aren’t the best option for your wallet.

Airbnb Cleaning Fees Can Be Brutal. Here’s How to Cope
You can take the edge off of hefty cleaning fees with a longer stay, spreading the cost out over more days.

Airline Prices Are Going Up, in More Ways Than One
While base rates may be lower than they were a decade ago, fees and inflation have really done a number on overall costs.

Filed Under: Liz's Blog Tagged With: airbnb fees, airline prices, big wheels, luxury cars, mortgages, target interest rates

Wednesday’s need-to-know money news

June 15, 2022 By Liz Weston

Today’s top story: Fed hoists key interest rate as mortgage rates reach new heights. Also in the news: A new episode of the Smart Money podcast on recession prep, a quiz to cut your credit card costs, and how long it could take for business travel to return to normal.

Fed Hoists Key Interest Rate as Mortgage Rates Reach New Heights
Some 30-year fixed mortgage interest rates surpassed 6% even before the Federal Reserve’s 75-point increase to the federal funds rate.

Smart Money Podcast: Recession Prep, and Lightning Round Money Questions
This week’s episode starts with a discussion about how to prepare your finances for a recession.

Pass This Credit Card Quiz and Cut Your Costs
Put your credit card knowledge to the test. Knowing the correct answers could save you money.

How Long Until Business Travel Returns to Normal?
Business travel is down, big-time, with experts anticipating a slow return to 2019 levels.

Filed Under: Liz's Blog Tagged With: business travel, credit quiz, interest rates, mortgages, recession, Smart Money podcast

Monday’s need-to-know money news

October 5, 2020 By Liz Weston

Today’s top story: Mortgage Outlook: A pre-election pause for October rates? Also in the news: A new episode of the SmartMoney podcast on the unequal employment recover and the case for used cars, many avoid bankruptcy out of fear, and how to opt out of pre-screened credit offers.

Mortgage Outlook: A Pre-Election Pause for October Rates?
Rates are standing still.

Smart Money Podcast: Unequal Employment Recovery, and the Case for Used Cars
Used cars are a no-brainer if you’re trying to save money.

Many avoid bankruptcy out of fear
People often wait too long to file, draining retirement accounts or other assets that would be protected

How to Opt Out of Pre-Screened Credit Offers
Reducing your junk mail.

Filed Under: Liz's Blog Tagged With: Bankruptcy, interest rates. SmartMoney podcast, mortgages, pre-screened credit offers, unemployment, used cars

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