Rental mortgage in retirement

[Abe Linc]

How to use 401K?

$200,000 in 401K, rental mortgage payoff is $130,000. Rental gives $500 monthly income from $2,000 rent. Should I use 401K to payoff mortgage and have that $2,000 as income OR take 4% of that 401K (only 8K) as income and keep the mortgage? 

[Theresa Harris]

I'm not familiar with tax implications of 401K (I'm in Canada).  A few questions... What is the interest rate on the mortgage?  How long do you have before the mortgage is paid off?  Can you use the money and get a better return?

Even with the mortgage paid off, some of the $2000 in rent will go to maintenance, repairs and property taxes.