how can money in IRA be used to pay off a house ?

[Anthony D.]

Is there a way to use retirement funds( eg. funds that one may have in an IRA) to pay off a house without paying the hefty 30% to the IRS for pulling the out money before retirement age?

[Dmitriy Fomichenko]

Anthony,

Retirement accounts are designed to provide you with the future benefits (at retirement), what you are trying to do is extract benefits from your IRA now, which is against the rules. The only way to accomplish that as Justin mentioned is to take a distribution which would result in taxes plus penalties both on state and federal level, which depending on your tax bracket might leave you only with half the balance you are pulling out, not a wise thing to do in my opinion if the mortgage you trying to payoff cost you 5% (or something close to that) and you could have 100% of your retirement funds invested in let's say a trust deed (via private loan) paying you 10-12% interest, which is completely sheltered from taxes, but the interest you pay on your house is tax deductible. You've got to look at the big picture!