We owe $18,000 on our mortgage, would it be wise if I took $18,000 out of my 401K via my employer to pay it off? We currently have $78K +- in that account.

[tob2009ias]

We also have a 2nd 401K with approx. $11,000 and I have a retirement plan with UPSF (25 years of service) If I do pay the mortgage off, I will definitely increase my contributions to the 401K I have with Old Dominion Freight Line.

[MichaelL1 · Accepted solution]

If you are under age 59 1/2, you will get hit with an early withdrawal penalty of 10%, plus pay regular income tax on it.

So if in the 25% tax bracket and 10% penalty plus state taxes (if in a taxed state), that can be approx. 40% in taxes.  Personal decision, but that is a lot of taxes, when you could pay extra on the mortgage and crack it out shortly. 

Below is a link to the tax brackets for 2017 (based on current tax law).

http://www.savingtoinvest.com/federal-irs-tax-brackets-tax-rates-and-other-tax-updates/

[SweetieJean]

Also, 401(k) plans are protected in bankruptcy, but homes generally are not.

[SweetieJean]

Also, 401(k) plans are protected in bankruptcy, but homes generally are not.