Should I borrow from 403(b)?

[addelheid]

46m/47f

Household income: ~ $180k L/MCOL

Investments:

Tax deferred: $755K
Roth: $275K
Taxable: $67K

Contributing: $45.5k to tax deferred and $12k Roth this year

Morgtage: $50K outstanding @2.75 (7.5 years remaining) / House value ~ $225k

Car Loans: $6510 @ 2.29% (15 months remaining) / $1250 @ 0% (5 months remaining)

Cash: $25K

Credit Cards: Paid off monthly

We need to do some repairs on our house that will likely cost $20-$30k. I’m considering taking a loan against my 403(b) to cover the costs. I’d adjust my allocation so the loan was in lieu of bonds to try to minimize the opportunity cost.

Job is secure. If something unexpected were to happen I’m sure I would be able to pay off any remaining balance and avoid the tax ramifications.

Terrible idea?

 

[starlight30]

@addelheid I wouldn’t. Why not a home equity loan? The interest may be deductible.

Or just save for it.

 

[addelheid]

@starlight30 Well.... not something I’d normally consider but paying the interest to myself vs the bank seemed intriguing. Not to mention I assume a home equity line would come with closing costs. This wouldn’t.

 

[onecreature]

@addelheid Or just hold off on the taxable savings for a few months. Sounds lile you guys are doing really well.

 

[mzwi]

@addelheid Yeah, especially if you’re already planning to contribute $67K to retirement this year... just pay for it in cash and put less in retirement