To use a line of credit or withdraw from savings
"No one can really answer this for you.  It is a matter of personal preference and the details of your situation.  There are some really smart people on here, when placed in your exact situation, would do completely different things.  Personal finance is overall, personal. If it was me, I'd never borrow money in retirement.  If I had the cash, I'd use it to help fund the purchase.  If I didn't, I simply wouldn't.  For me wealth retention (in your case) is surprisingly more about behavior than math (even though I am a math guy).  You are simply creating a great deal of risk at a season in your life with a diminished ability to recover from negative events.  In my opinion you are inviting ""tales of woe"" to be part of your future if you borrow. Others would disagree with me.  They would point to the math and show how you would be much better off on borrowing instead of pulling out of investments provided a sufficient return on your nest egg.  They may even have a case as you might have to pay taxes on money pulled out magnifying the difference in net income on borrowing versus pulling out in a lump sum.  Here in the US, the money you pulled out would be taxed at the highest marginal rate.  To help with a down payment of 50K, you might have to pull out 66,500 to pay the taxes and have enough for the down payment. The third option is to not help with a down payment or to help them in a different way.  Perhaps giving them a few hundred per month for two years to help with their mortgage payment.  Maybe watch their kids some to reduce day care costs or help with home improvements so they can buy a lower price home.  Those are all viable options.  Perhaps the child is not ready to buy a home. Having said all that it really depends on your situation.  Say your sitting on 5 million in investments, your pensions is sufficient to have some disposable income, and they are asking for a relatively small amount.  Then pull the money out and don't be concerned.  You nest egg will quickly recover the money."
Just to offer another alternative, consider Certificates of Deposit (CDs) at an FDIC insured bank or credit union for small or short-term investments. If you don't need access to the money, as stated, and are not willing to take much risk, you could put money into a number of CDs instead of investing it in stocks, or just letting it sit in a regular savings/checking account. You are essentially lending money to the bank for a guaranteed length of time (anywhere from 3 to 60 months), and therefore they can give you a better rate of return than a savings account (which is basically lending it to them with the condition that you could ask for it all back at any time). Your rate of return in CDs is lower a typical stock investment, but carries no risk at all. CD rates typically increase with the length of the CD. For example, my credit union currently offers a 2.3% APY on a 5-year CD, but only 0.75% for 12 month CDs, and a mere 0.1% APY on regular savings/checking accounts. Putting your full $10K deposit into one or more CDs would yield $230 a year instead of a mere $10 in their savings account. If you go this route with some or all of your principal, note that withdrawing the money from a CD before the end of the deposit term will mean forfeiting the interest earned. Some banks may let you withdraw just a portion of a CD, but typically not. Work around this by splitting your funds into multiple CDs, and possibly different term lengths as well, to give you more flexibility in accessing the funds. Personally, I have a rolling emergency fund (~6 months living expenses, separate from all investments and day-to-day income/expenses) split evenly among 5 CDs, each with a 5-year deposit term (for the highest rate) with evenly staggered maturity dates. In any given year, I could close one of these CDs to cover an emergency and lose only a few months of interest on just 20% of my emergency fund, instead of several years interest on all of it. If I needed more funds, I could withdraw more of the CDs as needed, in order of youngest deposit age to minimize the interest loss - although that loss would probably be the least of my worries by then, if I'm dipping deeply into these funds I'll be needing them pretty badly.  Initially I created the CDs with a very small amount and differing term lengths (1 year increments from 1-5 years) and then as each matured, I rolled it back into a 5 year CD. Now every year when one matures, I add a little more principal (to account for increased living expenses), and roll everything back in for another 5 years. Minimal thought and effort, no risk, much higher return than savings, fairly liquid (accessible) in an emergency, and great peace of mind. Plus it ensures I don't blow the money on something else, and that I have something to fall back on if all my other investments completely tanked, or I had massive medical bills, or lost my job, etc. In this equation the withdrawal rate is the percent you must pull from your savings to meet your expenses. For example if your savings is $100,000 and you need $10,000 annually for your living expenses then your withdrawal rate would be 10% (where 10k is 10% of 100k).  To complete this formula, you need to know how much savings you need to be financially independent before you can use this formula to find out how long it will take you. "Before anything, I see that no one mentioned the one thing about 401(k) accounts that's just shy of magic - The matching deposit. In 2015, 42% of companies offered a dollar for dollar match on deposits. Can't beat that.  (Note - to respond to Xalorous' comment, the $18K OP deposits can be nearly any percent of his income. The typical match is 'up to' 6% of gross income. If that's the case, the 401(k) deposits are doubled. But say he makes $100K. The $18K deposit will see a $6K match. This adds a layer of complexity to the answer that I preferred to avoid, as I show with no match at all, and no change in tax brackets, the deferral alone shows value to the investor.) On to the main answer - Let's pull out a spreadsheet -  We start with $10,000, and assume the 25% bracket. This gives a choice of $10,000 in the 401(k) or $7500 in the taxable account. Next, let 20 years pass, with 10% return each year. The 401(k) sees the full 10% and after 20 years, $67K. The taxable account owner waits to get the 15% cap gain rate and adjusts portfolio, thus seeing an 8.5% return each year and carrying no ongoing gains. After 20 years of 8.5% returns, he has $38K net. The 401(k) owner on withdrawal pays the 25% tax and has $50K, still more than 25% more money that the taxable account. Because transactions within the account were all tax deferred.  EDIT - With respect to davmp's comment, I'll offer the other extreme -  In his comment, he (rightly) objected that I chose to trade every year, although I did assign the long term 15% cap gain rate, he felt the annual trade was my attempt to game the analysis. Above, I offer his extreme case, a 10% return each year, no trade, no dividend. Just a cap gain at the end. The 401(k) still wins. I also left the tax (on the 401(k)) at withdrawal at 25%, when in fact, much, if not all will be taxed at 15% or lower, which would put the net at $57K or 30% above the taxable account final withdrawal.  The next issue I'd bring up is that the 401(k) is taken out at the top (marginal) tax rate, e.g. a single filer with taxable income over $37,650 (in 2016) would save 25% on that 401(k) deduction. Of course if the deduction pulls you under that line, I'd go Roth or taxable. But, withdrawals start at zero. Today, a single retiree has a standard deduction ($4050) and exemption ($6300) for a total $10,350 ""zero bracket"" with the next $9275 taxed at 10%. This points to needing $500K in pre tax accounts before withdrawals each year would get you past the 10% bracket. (This comes from the suggestion of using 4% as an annual withdrawal rate).  Last - the tax discussion has 2 major points in time, deposit and withdrawal, of course. But, the answers here all ignore all the time in between.  In between, you see that for any number of reasons, you'll drop from the 25% bracket to 15% that year. That's the time to convert a bit of money to Roth and 'top off' the 15% bracket. It can happen due to job loss, marriage with new spouse either not working or having lower income, new baby, house purchase, etc.  Or in-between, a disability put you out of work. That permits you to take money out with no penalty, and little chance of paying even the 25% that you paid going in. This, from personal experience with a family member, funded a 401(k) with 28% money. Then divorced and disabled, able to take the $10K/yr to supplement worker's comp (non taxed) income." This would depend on what transfer methods your Forex broker allows. Most will allow you to have a check or wire transfer sent...best thing would be to call/email your broker and ask how to get the money into your account. Keep in mind, many brokers will force you to withdraw using the same funding method you used to deposit, up to the amount of the deposit. For example, if I fund my Forex account with $500 on a credit card and make $500 profit, I now have $1,000 sitting in my Forex account. The broker will force me to withdraw $500 as a credit to my credit card before allowing me to use another withdrawal method. This is an anti-money laundering precaution. The latter. Simply because having some savings is always better than having no savings. Using a credit card in an emergency will always be an option (as long as you are paying off debt) but using savings earmarked for emergencies is better. I don't still have an account there, but ING Direct used to do that for you. They would set it so money would be freed up every 6 months but after a while you would have like 5-year ones to maximize returns. Think about the credit card business model... they have two revenue generators: interest and fees from borrowers and commissions and fees to merchants. The key to a successful credit card is to both sign up lots of borrowers AND lots of merchants. Credit card fortunes have improved dramatically since the 1990's when formerly off-limits merchants like grocery stores began to accept cards. So when a credit card lets you just pull cash out of any ATM, there are a few costs they need to account for when pricing the cost for such a service: Credit card banks have managed to make cash advances both a profit center and a self-serving perk. Knowing that you can always draw upon your credit line for an emergency when cash is necessary makes you less likely to actually carry cash and more likely to just rely on your credit card. The eligibilty of the deduction is based on what the borrowed money is used to purchase and NOT what asset is used as collateral.  So at the beginning of your mortgage, 10% of the interest is deductible because the entire loan was used to purchase the condo.  But when you withdraw money from the account the additional interest is usually not deductible.  It can get confusing with all the withdrawals and payments that will be coming in and out of the account if you happen to use it a lot like a chequing account. An easy example would be if you only paid the interest on the loan...  Say you had a $100 000 loan at 5% APY (for simplicity's sake).  After one year, you would have paid $5000 interest.  $500 of the would be deductible given that your office is 10% of the condo.  Then you buy a $1000 couch and continue to only pay interest for the next year.  You would have paid $5100 interest...  $5000 on money borrowed to buy the condo, and $100 on money borrowed to buy the couch.  So you can still only deduct $500. What happens when you pay back $500 against the line of credit?  Could you designate that 100% of the money should be applied to the non-deductible interest?  Or does it have to applied proportionally?  I don't know. I think it'd would be wise to separate the loans somehow.  Manulife may even have some tools to facilitate that.  However, I wouldn't recommend the Manulife One product.  I looked into when I was buying my house two years ago, and at that time it was too expensive.  The rate was the same that other banks were charging for a home equity line of credit (which was prime at the time).  You can replicate the Manulife One in a cheaper way using a traditional mortgage and a home equity line of credit...  The majority of the loan will be the traditional mortgage at (hopefully) a cheap rate.  Then you can use your line of credit as the chequing account.