Should You Use a RMD to Pay Down Your Mortgage?

The amount of interest you’re paying on your mortgage might help dictate whether it makes sense to use an RMD to pay off that loan sooner. But regardless of your mortgage’s interest rate, as long as it’s not astronomical, you’ll want to consider how putting more money into your home will impact your overall liquidity.

“When I walk clients through decisions like this, we look at which option leaves them better positioned for the unknown,” says Drew Lunt, founder and adviser at Scratch Capital. “Investing the after-tax RMD or using it for QCDs can preserve liquidity and allow total-return compounding to do the heavy lifting.”