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- If the amount withdrawn is significant, it could affect the amount deducted for Medicare premiums in a later year.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.