1. You stopped contributing to your 401k? That isn't smart either especially if you think you are better with a savings account earning what .8% if your are lucky. Or you can contribute tax deferred up to 16k plus a year plus a small employer match. If you can, max out your 401k AND a Roth assuming you make less than the threshold. At this point in your life, if you only have that amount saved you are just a little behind the 8 ball in saving.
2. Having a mortgage isn't all that bad, you get a tax deduction, so really you are paying 2/3-3/4 of that amount depending on your tax bracket.
What about the idea of borrowing 20000 from my 401 k to pay off a HELOC. Is this a good idea? Please help me. I can't seem to find anyone that can answer this question.
Depends on if you'll stay at your job long enough to pay it back.
Do you get a tax benefit from your HELOC?
How is your 401k doing?
There are too many variables to say whether it's advisable or not but right now I have my 401k in a stable asset fund as every fund they offer me has lost $ the last two friggin years other than that one! For me doing what you suggest would make sense however it may not for you.
You say you hate having a mortgage payment, but you would just transfer that mortgage payment to a retirement payment instead.
1st point - I wasn't aware of the contribution limit to IRA. I might just open up another savings account bearing interest or invest in CDs, even though they suck now, and save money that way. I'm a very frugal person (I live on SD) and I will eat cheap, live cheap, just to save money now and for the future.
2nd point - I guess I'm just impatient in paying it off. Right now, I'm not contributing at all to 401k, so that $ in the 401k is only growing by the stock price in each mutual fund I setup. Every job after that 401k that I have worked, I never took advantage of their 401k because it either sucked in matching or didn't match at all - plus I didn't see a future in those jobs. The 401k was established with my 1st job in Sept. 2001 and ended in June 2009. Their match was awesome and I took advantage of it (up to 8%)....wish I could find a company that would at least close to that in this day and age.
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