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retirement withdrawals

Q&A: Should I tap retirement savings for home repairs?

January 19, 2026 By Liz Weston Leave a Comment

Dear Liz: We had a plan to make our retirement savings last until our mid- to late 80s. Now we have unanticipated house repairs that could amount to tens of thousands of dollars. Should we draw down our retirement savings and pay the associated taxes at a 22% rate, or take out a home equity loan, or some combination of that? Or are there other ideas?

Answer: Obviously, money that you spend can’t generate future returns to help fund your retirement. Liquidate too much of your nest egg, and you could find yourself short of funds long before your retirement ends.

But loans require paying interest, increasing your living costs and causing you to draw down your retirement funds faster than intended. Which is the better option depends on the details of your situation. A fee-only financial advisor or accredited financial counselor could give you personalized advice.

They will also be able to discuss additional options. A reverse mortgage could allow you to tap your home equity without having to repay the loan until you move out, sell the home or die. Or maybe it’s time to sell the house and move to a lower-maintenance living situation, such as a condo or retirement community. There’s no one-size-fits-all solution, but discussing the possibilities will help you clarify which is the best approach for you.

Filed Under: Q&A, Retirement Savings Tagged With: downsizing, emergency expenses, HELOC, home equity line of credit, home equity loan, retirement plan withdrawals, retirement withdrawals, reverse mortage, tap retirement or get a loan

Q&A: Taxes on retirement account withdrawals

January 3, 2022 By Liz Weston

Dear Liz: I would love to give my grandchildren money, but I don’t want to pay the income tax on withdrawals from my IRA or 401(k). Will they get it tax-free when I die?

Answer: Unfortunately, no.

Withdrawals from retirement accounts are generally taxable, whether the person making the withdrawals is the original contributor or an heir. Furthermore, non-spouse beneficiaries of retirement accounts generally must withdraw the money within 10 years.

Filed Under: Q&A, Taxes Tagged With: q&a, retirement withdrawals, Taxes

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