Should You Pay Off Your Mortgage Before You Retire? (financial advisor, adult, legal)

[JRR]

Originally Posted by KathrynAragon

And some people can and do have both a pile of money AND a paid off house.

And if they had a mortgage, they would have an even larger pile of money, because all the money they spent on having a paid for house would be added to the pile.

I get that not having a mortgage is the right thing for you. Doesn't mean that it is necessarily right for everyone else.

[mathjak107]

Originally Posted by KathrynAragon

But it IS earning the appreciation, just like other investments that are "just sitting there" earning interest.

And my extra income every month comes in the form of zero house payment.

Cutting expenses only looks like extra income , until there is nothing left to cut and expenses keep rising ….

Ideally you need both , but one is not a replacement for the other


That is why Wall Street looks at profits , which can come from cost cutting and also revenue growth which can’t come from cost cutting

[mathjak107]

Originally Posted by JRR

And if they had a mortgage, they would have an even larger pile of money, because all the money they spent on having a paid for house would be added to the pile.

I get that not having a mortgage is the right thing for you. Doesn't mean that it is necessarily right for everyone else.

Exactly , if we had left the money we had tied up in the house we wouldn’t have the assets we have today since we wouldn’t have owned the real estate business we had bought with that money no longer in the house .

Today we can buy multiple homes like we had from the return on that investment

[GeoffD]

I didn’t buy clothes. My mother bought clothes. The worst possible thing was to get clothes for Christmas or birthday. Why would I want that? I get clothes anyways. LOL

My mother was a university professor. An awful lot of my clothes came from the Sears catalog. Some years, there was a big back to school shop in Boston or one of the inner Boston suburban malls. Shoes came from one of the two or three local shoe stores. The third store carried Hush Puppies which were a thing when I was a little kid.

[ChessieMom]

Originally Posted by HB2HSV

Earlier there was a heated debate here on whether you should pay off your mortgage before you retire. I found this article that offers good food for thought.

https://money.usnews.com/money/retir...ore-you-retire



Now let's share your experience and thought process on how you reached your decision.

I don’t recall a heated debate, but if it’s already been discussed then not sure why we need another thread on the exact same thing.

In any event, I will answer here as I answered there. I have no plans to pay off my mortgage. I never even considered it as a possibility. I simply have no need to do so. It will be paid off 4 years after I retire.

[adjusterjack]

Originally Posted by GeoffD

I didn’t buy clothes. My mother bought clothes. The worst possible thing was to get clothes for Christmas or birthday. Why would I want that? I get clothes anyways. LOL

My mother was a university professor. An awful lot of my clothes came from the Sears catalog. Some years, there was a big back to school shop in Boston or one of the inner Boston suburban malls. Shoes came from one of the two or three local shoe stores. The third store carried Hush Puppies which were a thing when I was a little kid.

You're in the wrong thread. See:

https://www.city-data.com/forum/retir...r-clothes.html

[adjusterjack]

Originally Posted by KathrynAragon

And some people can and do have both a pile of money AND a paid off house.

Me.

[nicet4]

Originally Posted by JRR

And if they had a mortgage, they would have an even larger pile of money, because all the money they spent on having a paid for house would be added to the pile.

I get that not having a mortgage is the right thing for you. Doesn't mean that it is necessarily right for everyone else.

I couldn't agree more.

If my mortgage interest was 7% I would pay it off tomorrow but to do so we would spend a huge percentage of our non-IRA funds to do so leaving us with very little non-IRA funds.

We owe $70,000 but with the interest set at 2.25% it simply doesn't make sense to me as our total principle and interest totals but a monthly $448.44 which is about 7.5% of our total retirement income.

I would rather have the cash near at hand.

That said I am still working full time even though I will turn 73 next month. While I am working I am paying more than $2,500/month towards the principle so while it is dropping fast it isn't in our retirement budget. If I can pay off the house in 2 1/2 years that's great but for a number of years now our spending and budget has revolved around "what if something happens and I can not work tomorrow?" If I couldn't work tomorrow we would be fine even with the mortgage.

And, as I have posted before, I do have one life insurance policy that is left that will cover the mortgage payoff for my wife is something happens to me.

[springfieldva]

I'll just take the happy medium and sell my current house, buy a less expensive smaller house outright and put the money leftover aside for a rainy day or to spend as I choose.

[Threestep2]

This an egg and chicken decision. I personally prefer not to have a loan outstanding. SO is drooling over major motor homes.