Wiping out your retirement?

Should you use your retirement nest egg to pay down a mortgage? Gerri Willis answers viewers' questions.

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By Gerri Willis, CNN personal finance editor

For more information on managing your largest investment, check out Gerri Willis' 'Home Rich,' now in bookstores.

NEW YORK (CNNMoney.com) -- Question 1. My husband is 62 and retired. I am 59 and working. Our mortgage payment is going to go up by $125 a month. We can barely afford it now. My husband thinks we should take out money from our retirement accounts and pay off the house. But we would only have $40,000 left in our retirement account. What do you think we should do? -- Irma, Texas

Wiping out your retirement money when you're both in, or near retirement isn't the best move you can make.

First, try to see if you can modify your mortgage at all. Otherwise, you may consider doing a reverse mortgage if you intend on staying in the home. A reverse mortgage is a type of loan where your equity is converted into cash. And you receive this cash either in a lump sum, a monthly payment or a line of credit that you can tap into.

There are a lot of nuances you should consider before buying a reverse mortgage. In fact, you are required to get counseling before buying this product. Contact the Housing Counseling Clearinghouse at 800-569-4287 to find a lender in your area. AARP.org also has a lot of information on reverse mortgages.

Question 2. I had two credit cards, but last month the issuer closed both of them. Now I received a "change in terms" notification from another credit card I've had for almost 15 years. If I do not agree to the terms, I can opt out and the account will then be closed. What is going to happen to my credit score? -- Sheila

Credit card issuers are more frequently closing accounts proactively if they haven't been used in a while. And unfortunately, your credit score has probably already taken a hit.

You should be wary of closing the account you've held for 15 years. That will just add to the damage especially since it's an older card. You can always try calling the credit card issuer to see if you can get your old terms back. Highlight your long history and good record with the company. And in the future, try to spread out your balances over a few credit cards so they're not inactive.

Question 3. I was left with several credit accounts that an ex-boyfriend "promised" he would pay for things he bought. He just walked away and said "too bad." It was $8,000. My credit is shot. I have been slowly paying back on the accounts but I have one that the company would not work with me. What are my rights for reworking this loan? -- Anonymous

Unfortunately your rights are limited to the terms of the agreement since the lender isn't doing anything other than attempting to collect, which is their right according to Credit.com. They can choose to work with you on a lower interest rate, lower balance or longer terms but that's completely up to them.

If your ex-boyfriend had promised to pay for the charges (via e-mail for example) then you might be able to recover the money through a civil lawsuit, but that's going a long way to collect a relatively small amount of money. To top of page

Gerri's Mailbox: Got questions about your money? We want to hear them! Send an e-mail,we'll answer questions on CNN, Headline News and CNNMoney.com.
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