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Old 08-12-2017, 10:58 AM
 
Location: SoCal
13,213 posts, read 6,313,926 times
Reputation: 9826

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It's a false comfort. If you don't have money to pay property tax or HOA, they will auction your house period. No difference from the guy who pays off the mortgage or who pays half off to the guy who borrows 90%.
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Old 08-12-2017, 11:19 AM
 
Location: 5,400 feet
2,620 posts, read 2,574,908 times
Reputation: 3667
Quote:
Originally Posted by ukrkoz View Post
OP, we are about same age, except that I am no related to militaries.
I shall (plan, at least) to retire at legal age for full benefit, that will be 66.5.
Though I do not have a "nice egg" because of the late start in the country, I shall liquidate my IRAs as of the 2nd week of January and dump it all into current mortgage. With final goal to kill it completely by the time I retire.
Small amount you have I'd have killed right away, without any plans shmans. Just kill the sucker. You save by saving interest you pay and you gain by natural property value growth. What is likely much higher return than what you have from you egg anyway.
Unless you are in some sort of magic know how on investing and have very good vesting into your retirement plan ( I do not) then you likely have piddly return on it, as chaotic as investments are as it is.
All I know is our properties GROW in value like on yest and investments can't climb out of red in years. So forget investments.
You may feel differently when you prepare your 2018 income taxes. Whatever you withdraw from the IRAs will be taxable at your highest marginal rate (or higher if it's big enough). So you will likely lose 25% or more of your IRA withdrawals to federal taxes (more if you have state income taxes).
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Old 08-12-2017, 02:42 PM
 
649 posts, read 553,976 times
Reputation: 1877
Quote:
Originally Posted by TuborgP View Post
How long have you been retired or are you still working. I understand fully your perspective but with time in retirement that can change.
Working for 1 more year. Will retire next August at 57, DW will be 54.
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Old 08-12-2017, 07:55 PM
 
29,774 posts, read 34,856,103 times
Reputation: 11687
Quote:
Originally Posted by MG120 View Post
Working for 1 more year. Will retire next August at 57, DW will be 54.
I will only tell you that our situation was similar and with time you might begin to develop a different perspective. Congrats it is a good place to be.
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Old 08-12-2017, 09:30 PM
 
Location: Central IL
15,207 posts, read 8,513,923 times
Reputation: 35600
Quote:
Originally Posted by MG120 View Post
Agreed, you are absolutely correct, but for us at the time, the psychological impact of having a paid off house was more important. We were willing to trade that "comfort" for lower overall growth in our portfolio. Especially when you know that you will have 2 pensions that will replace 75 percent of pre-retirement income. SS, IRA/401(k)/457 are just an added bonus. The kicker for us was health care coverage for life.
...it's important to know when feelings should trump logic and when logic should trump feelings. I've been shoveling the same amount as my mortgage into retirement savings. I refinanced a couple times and will pay my mortgage off in 23 years rather than 30 but it was never the priority. It'll be paid off before I retire but since the interest rate is low, it makes a lot more sense to get those investment returns for a couple decades.
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Old 08-13-2017, 06:34 AM
 
Location: RVA
2,164 posts, read 1,265,106 times
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We are looking to move in 2 years and the house will be for practical reasons paid off. The plan is to only put down enough on the new one to avoid PMI, and conservatively bank the rest in after tax accounts. We will not need the money to live, and just DWs pension & SS would pay the new mortgage. My pension, SS and retirement savings will be for living on. Since I've never not had a mortgage. I suspect it will not bother me, but if we decide it is smarter, or we want that debt gone, we can pay it off with no impact. But I'd rather have the cash out, and a mortgage in case we want to move again, than have to rely on selling the house to avoid using retirement funds and hassle with getting a mortgage once the paychecks stop.
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Old 08-13-2017, 08:47 AM
 
29,774 posts, read 34,856,103 times
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Quote:
Originally Posted by Perryinva View Post
We are looking to move in 2 years and the house will be for practical reasons paid off. The plan is to only put down enough on the new one to avoid PMI, and conservatively bank the rest in after tax accounts. We will not need the money to live, and just DWs pension & SS would pay the new mortgage. My pension, SS and retirement savings will be for living on. Since I've never not had a mortgage. I suspect it will not bother me, but if we decide it is smarter, or we want that debt gone, we can pay it off with no impact. But I'd rather have the cash out, and a mortgage in case we want to move again, than have to rely on selling the house to avoid using retirement funds and hassle with getting a mortgage once the paychecks stop.
Your last line is key in this discussion. As MJ often says when you have pensions the pay checks never stop and that is a major part of most of our discussions.
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Old 08-13-2017, 01:50 PM
 
Location: Central Massachusetts
4,800 posts, read 4,844,519 times
Reputation: 6377
Quote:
Originally Posted by Perryinva View Post
We are looking to move in 2 years and the house will be for practical reasons paid off. The plan is to only put down enough on the new one to avoid PMI, and conservatively bank the rest in after tax accounts. We will not need the money to live, and just DWs pension & SS would pay the new mortgage. My pension, SS and retirement savings will be for living on. Since I've never not had a mortgage. I suspect it will not bother me, but if we decide it is smarter, or we want that debt gone, we can pay it off with no impact. But I'd rather have the cash out, and a mortgage in case we want to move again, than have to rely on selling the house to avoid using retirement funds and hassle with getting a mortgage once the paychecks stop.
I would certainly agree on that point. Should I buy a house. Also it would depend on the cost of the new house. if it was as much or more for instance I would do that exactly. If however the house or condo (my possible choice) cost 1/4 to 1/3 of the sale of my house I would pay cash. It all depends on what the next plan is.
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Old 08-13-2017, 05:08 PM
 
Location: Somewhere in Colorado
154 posts, read 99,852 times
Reputation: 319
Quote:
Originally Posted by jghorton View Post
A HELOC (Home Equity Line of Credit) uses the equity in one's home as collateral for the line of credit. Of course one can get a HELOC on a paid-off home, since what matters is one's equity in the home.

My point in this thread was that banks have made it significantly lore difficult to get a HELOC ... almost as if one were applying for a primary mortgage .
Agree with you in premise. I was flat refused by a credit union I'd been with for 25+ years and had a 800+ FICO score. I was looking for a $30K line on a paid-off house worth over $250K and the loan was for home improvements. They told me no deal without a first mortgage. This was in 2011 -- I probably should have investigated more, but being debt-adverse anyway, I let it go.
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Old 08-13-2017, 06:13 PM
 
2,443 posts, read 2,069,466 times
Reputation: 5690
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Originally Posted by TuborgP View Post
Your last line is key in this discussion. As MJ often says when you have pensions the pay checks never stop and that is a major part of most of our discussions.
There have been cases where pensions did indeed stop or were greatly reduced.
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