Mortgage and taxes


Q. I turned 62 in December. I am 100 percent disabled from combat wounds.  I worked federally for a while and saved $102,000 in a G Fund under FERS. I’m about to start losing my home as my wife will have to retire this year. Without her income, we won’t be able to afford the mortgage (but no credit card or other debt on the house.)

What percentage at age 62 does a 100 percent disabled vet have to pay when withdrawing savings in full?  I think it’s stating 20 percent, but that doesn’t seem reasonable. Am I reading it wrong? I want to pay down my home and refinance to lower the payment to keep from going into default and losing it. It’s all we have, and with the market crash, we lost what equity we had in it. We both have AAA credit scores (low 800s) and have held on as long as we can, but the recession and times have finally caught up to us.

Can you explain what would be the best way to pull the money out in full so I can pay off my mortgage and keep my home?

A. While you may wind up owing less when you file your tax return, there will be 20 percent withheld from your distribution against your federal tax liability.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at

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