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Realistically we will not live long enough to pay off our mortgage, nor do we want to as we would not really benefit from doing. Besides, the interest rate is a comfortable 2.25% and the payments low by most standards. What money we do have we'd rather spend in other ways.
Realistically we will not live long enough to pay off our mortgage, nor do we want to as we would not really benefit from doing. Besides, the interest rate is a comfortable 2.25% and the payments low by most standards. What money we do have we'd rather spend in other ways.
The ability to spend can be one of the joys of retirement. Debt is a relative term and that's why lenders use debt to income as a standard. I would rather have the cash and be able to pay for a medical test that isn't covered or a new drug that might not yet be covered. I just had a mix up in testing I had done and had to be retested. Probably both tests will be covered by insurance but if not just being able to pay for the retest is comforting.
..... I just had a mix up in testing I had done and had to be retested. Probably both tests will be covered by insurance but if not just being able to pay for the retest is comforting.
This is off topic but, you should not need to pay for a mix up in testing... nor should the insurance have to pay. Any reputable lab will perform retesting on the original and/or a new specimen whenever the doctor questions the validity of the results.
I'm kind of simplistic about this 'predicament'. If you can get a better return from investing the money (taking into account tax on the returns) than you can from paying off the mortgage (taking into account tax relief) then that is the way to go. However, paying off the mortgage does give a risk free return. There is no investment risk associated with paying off a debt. So, if you are risk averse then this can be a better option.
It's all about what your comfort zone is. I prefer to be debt free and have been so for about 20 years. I'm 58 and can retire when ever I want to at this point. Will I take on a mortgage for dream retirement home? No, but that's just me. I like the feeling of being debt free and understand that we have a large amount of cash that is non liquid. We also have a large amount of cash that is liquid but stagnant. I'll be finished being a workaholic wage slave soon and that money is earmarked for two vacation rentals. That will take a lot of travel and research before it's invested and I will have to retire to do so. I hear ya about the stock market whocares. We are out of that as well. It's too late in the game for us to be taking chances. There's also an annuity if you want to go that route, but I prefer to manage my own money. I don't have time to read this whole thread but I'm sure others have advised you to talk to a financial planner. I'm doing another double pm/night shift tonight and the second one this week. I'll be happy when this part of my life is over and it's just around the corner.
According to the OP they 1) are currently working earning 2) on top of all their bills
3) expect to get a pension (and SS etc) and continue to be just fine in retirement
even before this windfall 4) expect to sell the house they have now in a few years,
then 5) plan to buy a smaller property.
So what's the hurry to pay off the -almost entirely principle- mortgage balance early?
What's the benefit?
This is off topic but, you should not need to pay for a mix up in testing... nor should the insurance have to pay. Any reputable lab will perform retesting on the original and/or a new specimen whenever the doctor questions the validity of the results.
No the mix up may turn out to be a plus. They did non fasting testing and the results came out high thus the retest. If they come back normal great and if they come back again high a blessing to have found out before my next full physical. I pigged out before going to the doctor and at any rate a reality check is a blessing. Per the topic I don't mind paying for testing and having a full picture every six months instead of yearly.
According to the OP they 1) are currently working earning 2) on top of all their bills
3) expect to get a pension (and SS etc) and continue to be just fine in retirement
even before this windfall 4) expect to sell the house they have now in a few years,
then 5) plan to buy a smaller property.
So what's the hurry to pay off the -almost entirely principle- mortgage balance early?
What's the benefit?
From the OP ....
Quote:
Originally Posted by whocares811
However, we (and especially I) are very uncomfortable doing so, as we have always been "bird in the hand" type people and are definitely not risk takers.
Paying off debt could be the best 'risk free' bang for the buck.
It's all about what your comfort zone is. I prefer to be debt free and have been so for about 20 years. I'm 58 and can retire when ever I want to at this point. We also have a large amount of cash that is liquid but stagnant. I hear ya about the stock market whocares. We are out of that as well. It's too late in the game for us to be taking chances.
What? Too late in the game? at 58? Too late to put the percentage of your money you will use later in life in the only place where you will beat inflation? By not being in the market your are not taking chances with success, but guaranteeing failure. Inflation WILL kill you. Unless you have SO much money it doesn't matter, (doesn't sound like it), or so little that it makes no difference (doesn't sound like it), then you have to be invested to stay EVEN, much less, get ahead. The other exception being that you plan to only live on fixed retirement income and and SS forever, and purchase everything you will ever need for the rest of your life at retirement, otherwise this is pretty self defeating if you count on the savings for anything..
Of course, it's your money and life, do what you want. I'm the same age and have most everything in mutual funds and equities, and have had for most of the investing portion of my career, and it's the only thing that's gotten me way ahead of the curve. If you are diversified, and know not to panic when things aren't all bull market, then you will win. I lost nothing during either of the last two major dives, 2001 & 2008 because I never sold anything. On paper it looked dismal, but instead, I bought in whatever I had into the market while it was on sale. And I am fairly risk adverse preferring index funds. As mathjak said somewhere, "there's a big difference between volatility, and risk"
long term it is those investments the ill-informed think are the safe ones that have had more failure periods than anything else.
safest long term investment through every 30 year retirement time frame since 1926 has been equities. the worst over and over has been bonds and cash,
best has been a 50/50 mix , drawing 4 % and taking a raise by the rate of inflation every year has outlived almost every 30 year time frame and 90% of the time left you with more than you started with 30 years later .
if that is risky to anyone then you need to get educated on the subject.
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