<prompt> Human: Sadly, I lost my mom to pancreatic cancer a couple months ago. Im an only child and the last remaining heir and have therefore assumed ownership of an IRA with 130,000 in it. Typically, I would lean towards leaving the vast majority of this money alone, perhaps rolling in to my 401k or similar. However, my wife and I are house hunting in an expensive market Boston and if we put the money towards a down payment on a home we would of course save money on interest over the life of the mortgage, and give ourselves some buffer in our emergency savings. For the sake of this discussion, lets assume our new home costs 450,000. We have about 120,000 saved not counting this new IRA and retirement savings so the 20 down payment closing costs are going to come pretty close to wiping out our savings. If we were to take out all of my Moms IRA it looks like Id be left with close to 100,000 after taxes. Im basing this off of the assumption that the 130,000 would be added directly to our AGI and wed be paying 24 on it based on the new tax brackets Still using this 450,000 house assumption, we could now have a down payment of something like 180,000 and still have 40,000 left in savings. Our mortgage would be 270,000 rather than 360,000. Wed have lower mortgage payments obviously and maybe we could even look into a 15-year mortgage.Im not sure what to do though, as:A I dont know if my tax calculations are correct. It seems simple enough, but even tax lawyers dont know whats going on with the new tax code right now, so I could definitely be missing something. I do my own simple taxes and have never had a tax advisor so I dont have an easy person to turn to. B I hate to spend all of that money in one lump sum. I am not sure how much my emotions are tied up into this though - Im essentially spending my parents life savings so it is hard to let go of. C I will have some new expenses as Ive also inherited my parents house. These are minimal though as it is paid off and in rural Maine so Im looking at less than 2000 a year on taxes and property insurance. I cant see how owning the house costs me more than 5000 a year on average, and I could eventually rent it out some as it is in a winter resort area. If I could break even on owning it Id be thrilled. For some additional context, my wife and I make 150,000 annually pretax. We have no debts except for 10,000 left on my wifes car and paying cheap rent, so were saving 2000 a month without even being as frugal as we should.I hope Ive included all of the needed details, and many thanks for any advicethoughts you have.Assistant: Given the difference between the low interest rate on your mortgage and your high tax bracket, youll basically never make up for the tax hit from pulling the money out now. An inherited IRA is not like a normal inheritance: It cannot be rolled over into your 401k or IRA, and it does become taxable income if you take it all out. If you leave it in which you should, it becomes its own separate beneficiary-IRA. Youll have to start taking annual Required Minimum Distributions, but you can elect to stretch these distributions over your life expectancy. These distributions will be taxable income each year. So, youll start seeing some extra cash flow each year. This is much more tax-efficient than pulling it out now, or under the 5-year rule if you dont elect to do the stretch.Human: Gotcha. Yes, the Required Minimum Distributions are small and clearly more tax-efficient. My conflict was basically what you mentioned - will I make up the hit on the taxes over the life of my mortgage, and in addition to this, will the lower mortgage payment be more advantageous in general than having the money invested. Many thanks for your response.  <response>: You probably wont make up the difference on your mortgage rates, but remember that life isnt just about finding the best percentage returns. You need to figure out a way to weigh the stress it might relieve if you have better cash flow and savings by having a smaller mortgage. IF you are thinking of putting it towards a mortgage, remember you can still get a 30 year loan and pay it off as if it were a 15. The extra flexibility might be worth the small interest difference. Food for thought. 