Withdraw money from Fidelity Account
I have $27,895 in a pre-tax 403B Fidelity Account, my tax responsibilty is 20% [-5,579] I owe $25,447 to pay off my home. Hearing the extreme volatilty on the market, and rather than lose money, would it be wise to use this money to pay off my home?
Terry Says
First of all, you will have to pay ordinary income taxes on the money. So you’d want to set 20% aside for taxes.
Second, you’ll lose all future tax-deferred growth, so what will you have to live ion in retirement?
Third, if you’re already retired, and on Medicare, this size withdrawal could boost your Medicare Part B and D premiums!
Fourth, I have no idea what your mortgage rate is, but if it’s less than 5%, you’re probably better off keeping it.
Is there a better and safer investment choice in your 403b plan? Are you still working, and if no safer alternative, could you take a loan from your plan, thus reducing your investment exposure? If you retire without repaying the loan, it would become taxable income at that point.
