I have never sold any stock (except TLH) but considering selling some funds to pay off mortgage balance (38k) from taxable account.
Plan to FIRE in 2025, will have large vacation payout making yearly income the same or larger.
Work part time- gross about 120k, rental income about 40k, single filer, no kids, live in CA.
I have about 12k in Federal MMF for mortgage payoff, adding about 1k per month.
I have a taxable account for the property that has enough extra to pay off the remaining balance (26k).
Using a capital gains tax calculator estimating gross income at 160k, 10k gain, total taxable 170k, estimated capital gains federal tax is $1500, state tax is $1023. I'd pay $2523 in taxes for 10k appreciation.
Is this a dumb move? I feel like its kind of dumb but I've never sold funds before and once I retire, I will need to get used to selling funds to live off of...
I get taxed for interest in HYSA accounts and for dividends/distributions so I don't know if its better or worse to sell and pay taxes or use cash at hand?
I do have enough cash to pay off the balance but that would use up most of it (have plenty of funds in taxable/401/still working) and would be able to build it back up fairly quickly.
I've been a good saver but learning how to sell/live off of investments is new to me.
Thanks in advance!