I know the number one rule is to not use retirement money early to pay off a mortgage. But i truly hate the feeling of having this mortgage. And i really want to pay it off.
I understand 401k money is taxed when you pull some out. I also understand there are penalties involved in pulling money out early. But i do have some questions.
Assume I needed 150k from my 401k to pay off my mortgage. Lets say my salary per year at my job is 150k a year. Does this mean come tax time (say for 2022) i would be reporting that i made in actuality 300k due to pulling 150k from my 401k and plus my regular salary?
I just would like to know how that works as ive never pulled out of my 401k. For background Im in my early 40s with close to 1 million in my 401k.
I would like to pull out 150k from my current fidelity 401k (may need to pull 200k due to taxes etc). So basically my question is how does this all work during tax time am i reporting i made 300k?
I do understand this is not the ideal solution etc etc and i understand the ramifications of losing compounded gains / interest over time. I also understand the money is taxed and their are fees for early withdrawals please focus on my question no need for lecturing.