I’m 67 and retired. What would be the consequences of using IRA funds to pay off my mortgage?

by Joseph A. Pancerella, CPA | Jul 29, 2019

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I am retired and 67 years old. Can I use my IRA money to pay off my mortgage? Will it affect my Social Security? 

Yes, it could affect you in many ways, including the following:

  • If you withdraw a significant amount from the IRA, it could make a larger percentage of the Social Security taxable (up to 85%), and also move the income into a higher bracket.
  • If the amount withdrawn is significant, it could affect the amount deducted for Medicare premiums in a later year.

Those are the two most common issues, based on my experience with clients. I suggest you consult a CPA for best practices regarding your situation. 

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Joseph A. Pancerella, CPA, is managing director of Pancerella & Associates LLC in Reading, Pa.

Disclaimer
The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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