Deferred Comp Withdrawal Tax Question
Should I withdraw from 457 deferred comp acct.which is in mutual funds. to pay off house mortgage. Household (wife and me) income is $103,000 pension and $27,000 from part time work---total yearly income $130,000---net is $104,000. Mortgage payment is $1500 per mo.,(P&I). 8 yrs left on mortage at 4.24 apr fixed. I have $150,000 in 457 account. I owe $120,000 on mortgage. Should I take out the $150000 and pay off the $120000. 20% would be withheld and I would clear $120000 for mortgage payoff.I have no other bills. I could save the $1500 per mo. that I am now paying on mortgage. Since fed taxes are going to be lower the next 2 yrs would it bebefit me to withdraw the money during this time period. Would drawing out the $150000 in one year cost me more due to a higher tax bracket or would it be better to draw out have 2011 and half out in 2012 and apply to mortgage balance. I am 67 yrs old wife is 57.
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