Should I pay off my home equity line of credit ?

[RichardBC]

Hello,

My wife and I are retired and we each have a pension, enough to pay our bills and some months actually save a little money .

My question is this: we have a small amount on our home equity line of credit to pay off ($17,000). It is at the stage where we can not use the line of credit, instead just pay on it.

We also have an IRA, which we can take from without any penalties.

Should we continue to pay on the line of credit,(which we could be paying for 10 more years) or take the money from the IRA and pay it off.

I realize I will have to pay taxes on the money I take from the IRA.

Thanks for any advice,

RichardBC

[bjl584]

We need more info.

How much do you have in retirement savings? What are your expenses?

Paying off debt is usually never a bad idea, especially in retirement.

I'm assuming that the HELOC has a variable interest rate, and that the payments are starting to creep up as the Fed raises rates?

[RichardBC]

This is our situation :

~$280,000 in an IRA

Pension per month ~ $4000

Expenses average $2000 to $3000 per month

We are able to save enough money each month for long term bills (real estate taxes,Homeowner and auto insurance,etc.) This amount is included in our expenses.

We are okay at the moment, however when I turn 63 , a portion of my pension will go away.(due to an early retirement supplement I was given).

I will have ~$2800 per month at that point.

In order to keep my expenses per month down, that is why I am considering paying off the HELOC .

[bjl584]

I'd probably pay it off and be done with it.