• Question
  • IRA vrs HOME EQUITY LOAN

    Asked by someone from Durham, NC on 4/16/2016

    IS IT BETTER TO TAKE MONEY FROM OUR IRA OR USE OUR HOME EQUITY LOAN .
    WE ARE RETIRED
    SS ONLY INCOME SOURCE
    LOAN IS 3.25%

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  • Categories: Retirement Assets and Savings, IRAs

Answers

  • Steve 

    Steve 
    NewRetirement

    San Francisco, CA

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  • There are a lot of factors that go into this decision including but not limited to:
    - what happens with interest rates vs. returns in the equity market
    - the level of risk you are comfortable with
    - your tax situation (getting liquidity from debt HELOC won't create a tax obligation, but tapping your IRA might)
    - your Required Minimum Distribution levels

    This is worth talking with a financial advisor about - one who has a fiduciary relationship with you - you can look for one here: https://www.newretirement.com/free-retirement-consultation.aspx

    You may also want to model different options using our Retirement Planning tool: https://www.newretirement.com/retirement-calculator/

    Finally here is an article about how you can use Home Equity in retirement:
    http://www.newretirement.com/blog/2015/10/23/how-to-think-about-home-equity-for-retirement-strategically-vs-tactically/

  • Login to rate this answer:   Answered on 4/27/2016
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.