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My personal philosophy is that all mortgage questions should be resolved before you retire. Have a mortgage or don't. Just answer that question early on.
I'm not sure what good that does when your circumstances can change after retirement, sometimes abruptly.
We had agreed we would take out a mortgage on the Arizona house but treat it as a bridge loan by prepping and selling the California house ASAP. But then there was that pandemic thingie. You may have heard of it. The AZ house was a far better place to ride it out.
We still have a mortgage, but now we're getting refinancing offers left and right. (Where were they last year?)
The $426.19/month mortgage isn't going to kill us it represents just 8% of our total retirement income once I stop working. We could actually pay it off in six months without having to dip into our retirement accounts but it would wipe out our cash savings and I don't like that.
I just like the idea of the extra cash. If I want $50,000 in cash I like the idea I can just go to the bank and get it.
Oh, and the love of my life is taken care of, if something happens to me there is enough life insurance where she would be able to knock out the mortgage and live comfortably.
Keep the cash for emergency.
Since the mortgage payment is only 8% of your retirement income, it's not going to pose a threat to your economic situation in retirement. The 2.5% interest rate is "cheap money".
In general, I'm supportive of your keeping the mortgage and keeping a bit on the liquid side, I just wish the place you were parking your $50k cash was a bit more lucrative than a bank savings account. You are paying 2.5% (currently $1600/year) for the privilege of being $50k liquid.
In general, I'm supportive of your keeping the mortgage and keeping a bit on the liquid side, I just wish the place you were parking your $50k cash was a bit more lucrative than a bank savings account. You are paying 2.5% (currently $1600/year) for the privilege of being $50k liquid.
I keep my cash in a tax free municipal bond that pays 4% yield annually. Just think that you pay 2.5% interest for the mortgage yet you'll be receiving a 4% yield tax free, you'll be making money. The bond price is relatively stable not affected by the stock market performance (it does go up & down within a small range).
Very much a personal choice. Our goal was not to have a mortgage in retirement, & we like it that way, but of course others feel differently. Be careful how much cash you have at home, we lost our home to a fire a few years ago, & while I grabbed a few things on the way out the door, the cash was not one of them. Keep enough in your wallet.
Carrying a mortgage is a personal choice and often debt is the only choice one has. Myself, I like being debt free. I like not have to think nor pay attention about such things.
As others have said, it is a personal choice. I haven't had a mortgage in something like 14 years. It feels good. I may be one of few that dislike debt. Life seems so much easier with just the routine utilities and cc on auto pay.
I have enough cash in laddered CD's if need arises. Some would say I am not getting a good return on them - so what! I'm not required to maximize an inheritance.
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