We're considering cashing out our IRA to pay off mortgage and some other debts, does this make sense?

[Lisa995]

If youre under 59 1/2 it can be a very expensive place to get money.

[SweetieJean]

And even if you are not, your mortgage interest rate is still likely to be less than your ordinary income tax rate.

[xmasbaby0]

That is not really an income tax question, which is what we are here to answer.  But you should be aware that if you are under age 59 1/2 there would be a 10% early withdrawal penalty for cashing out the IRA, and then you would also pay ordinary income tax on the money, based upon your tax bracket.

[SweetieJean]

And an increase in income can reduce or eliminate some deductions/credits.