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Posted in Saving Money
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curious59er

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Home equity loan or 401k spending
Is it wiser to take a home equity loan or to use cash from my 401k to finance my daughter's wedding and some home improvements? I'm 59.5 years old, so I can tap my 401k without incurring penalties. However, I would pay tax on my increased income from the 401K withdrawal, and my current home mortgage has only 3 years remaining, so I'm losing my home mortgage interest deduction on my current income tax filings.

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Top Contributor
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Calculate

You'd have to be willing to calculate the difference between the 2 options:

1) Marginal Tax on the 401k withdrawals

2) Mortgage Deduction you wouldn't be able to take on your taxes in increased income

3) HELOC loan rate

Good Luck.

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