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I saw the result of that with my own father. In his case it wasn't about working, but I never saw him spend a penny on himself his entire life. The only way he could justify buying anything for himself was to turn it into a for-profit hobby. Long before collecting was popular, he was scrounging at garage sales, flea markets, and thrift stores and flipping items for a profit. He also flipped homes decades before anybody popularized it, only Dad's way of flipping was moving every 4 years. Every 4 years he would buy a home, remodel the kitchen & bath and odds and ends, and then sell and buy a new fixer to move into.
The old man was a pioneer.
My old man was the exact same way, never made over about $30K/year working but was your "millionaire next door" that nobody knew was a millionaire, even his kids didn't.
You are ready to retire emotionally and mentally and I think you can do it financially if either of you don't get sick or have God forbid an accident. I can't for the life of me figure out why you still have a mortgage to pay. Why didn't the home you sold pay off this existing home? Have you checked your mortgage to see if you add extra $ to the principal only you won't get charged a fee. I made sure i could add extra $ to my principal only along with the regular mortgage payment. Two separate checks every month until I finally got an account to do auto pay with the extra specifically for the principal. Extra towards the principal means less interest for the bank to charge in the long run that helps get it paid off sooner.
I'm pretty sure that extra payment against the mortgage that he's making would be going to principal, no?
When I pay my mortgage, there is a field for adding extra principal. I do the same as the OP, round up to a specific number.
Lets look at that mortgage payment
I'm guessing that about $400 of that $741.57 is the mortgage payment and the rest is escrow for tax & insurance.
The tax & insurance payment ain't go'in away if the loan is paid off
The amount paid on principle is just cash being converted to home equity, so it's not really money spent, it's not gone.
That leaves 1/12th of 2.5% of 58000 or $120.83 as the only monthly cost to be eliminated by paying off the mortgage.
I'm not for using up most of the available cash to pay off the house.
Nearly exactly correct and that is the reason I am not paying off the mortgage.
As of August the interest on the mortgage payment was only $123.47 while property taxes were $293.55 and insurance was $21.83. While I'm still working we put anywhere from $2,000 to $3,000 onto the mortgage so the interest payment drops every month.
Insurance is low because the HOA fees cover the insurance to the exterior of the building such as roof etc.
Job income comes out to a take home of $4,533/month but one thing I always do is make sure $14,000 of that ($7,000 for me $7,000 for wife) is added to our IRA funds which leaves just a bit over $40,000. I still have to deposit another $7,000 for this year to bring us up to the $14,000 and we'll do that next week.
I work nearly 800 miles away from where I live so there is a commute. Usually I work at work for two weeks then work from home for two to three weeks going back and forth. The company pays for gas and I get an allowance for the car so driving back and forth costs me nothing. When I am at work I rent a nice little travel trailer that is located in a wooded area of a farm. I enjoy watching the deer with my coffee in the morning and while the travel trailer is not where I would want to permanently live it's nice and cheap with rent and utilities running about $400/month. With the extra expense of food I figure working costs me maybe $800/month which includes rent and utilities.
Going over the budget if I worked until the end of 2023 we could pay off the mortgage, deposit an additional $14,000 into the IRA's and end up with $47,920 in what I call "ready cash". If I worked in 2023 the first $14,000 would go into the IRA so we don't have to pay taxes.
This is what I would like to do but I am beginning to think I simply can't work anymore.
Ready cash is what we carry in our local bank account and does not include any savings at Stifle which we don't touch. We can do whatever we want with Ready Cash and if we want to take a cruise or travel to Vegas for a week we would simply do it and have fun.
Psssst.. don't tell anyone but we also keep between $4,000 and $5,000 in cash hidden in the house just for in case we might ever need it. Our daughter knows exactly where it is hidden.... in a fire proof envelope my wife insisted we have.... well hidden.
The life insurance stays it's for the financial protection of my wife.
We lived several states away where the cost of homes run at half the money one would need to purchase the same home here. Sell the three bedroom/two bath home there for $120K and purchase the same thing here for $200k back then which is now $350k today.
Wife wanted to move to be near the grandkids so she could be grandma.
I checked and before I took out the mortgage and we don't get charged a fee.
If I worked for one more year we could pay the mortgage off without digging into savings but I just don't think I could do it. The stress is killing me.
You have two options -
1) You back off from work and let others take on some of the load while you ease yourself towards retirement over the coming year. Remain available to answer questions and guide your coworkers as they train take over your duties but consider the coming year as your transition out of there. Realize that you could retire today if you had to, there is an out if you need it.
2) Retire as soon as possible. Do not stay in a job that is threatening your physical health. Your wife loves and needs you, so do your kids.
As of August the interest on the mortgage payment was only $123.47 while property taxes were $293.55 and insurance was $21.83. While I'm still working we put anywhere from $2,000 to $3,000 onto the mortgage so the interest payment drops every month.
Going over the budget if I worked until the end of 2023 we could pay off the mortgage, deposit an additional $14,000 into the IRA's and end up with $47,920 in what I call "ready cash". If I worked in 2023 the first $14,000 would go into the IRA so we don't have to pay taxes.
This is what I would like to do but I am beginning to think I simply can't work anymore.
I wouldn't put extra money into your mortgage. I would add the extra money into your bank account for emergency situations. I know people say you can always get a HELCO if you run into trouble. But, when you're in trouble, will you have the energy to go to a bank for a loan? I wouldn't. More ready cash is better.
I wouldn't put extra money into your mortgage. I would add the extra money into your bank account for emergency situations. I know people say you can always get a HELCO if you run into trouble. But, when you're in trouble, will you have the energy to go to a bank for a loan? I wouldn't. More ready cash is better.
Plus , remember in 2008 helocs were closed or not issued .
You also need the same credit and finacial shape for a heloc as a mortgage now
I would say KEEP working,ONCE you quit and need to go back,you wont be able to find a job like you have now.
Quote:
Originally Posted by mojo101
One thing one easily finds out is that your friends aint your friends once you become unemployed(not retired) and if you ever dare to ask help like $$.
Even siblings wont help,only parents do and you are too old to have living parents.
Your only way to come up with extra dough $$$ besides being on welfare is to sell on Ebay,what ever you have that some bottomfeeders want
Quote:
Originally Posted by mojo101
Go ahead and quit your job,if you think Dink Dong Fed is going to bring inflation back down to 2% soon
My goodness! WHy all this negativity? The OP is 74 years old. He's earned his retirement.
OP, don't listen to Debbie Downers. Retire now and enjoy the rest of your life. The stress from your job is unhealthy.
OP, you have ample money in the budget to retire from what I see. Your monthly cashflow as described will cover your expenses. If things should ever get tight you can cut back on the extra mortgage payments and the church support. You can shop for your best Medicare plans every year and maybe save something there. You can always cut back on the $2100 "food, clothes, HL" line item. You probably have more clothes than you need already, and there's plenty of slack in that line item. One of the life insurance payments will be going away in a year and a half too. You always have the emergency fund, the IRA if inflation starts to eat up the budget.
Read Wile E.Coyote's post. He's right. You'll be fine financially, just retire before you get killed on the freeway making that commute or something.
Last edited by TheShadow; 11-21-2022 at 09:01 AM..
I agree with the posters who are saying to not make "extra" payments to the mortgage. This is doubly true today, as you can get over 4% in T-bills as short as 3 months.
I also have to question carrying life insurance any longer. I'll guess this must be a whole life policy, or similar? Seems like an awfully big burden, and if there's a cash value you can get out you could turn that negative cash flow into a positive cash flow. Is there a specific reason you own this, or is it just something that you got talked into buying years ago?
OP, this IS a no brainer -- you can definitely afford to retire....As I've said I think you're nuts (in a good and admirable way) for still working.
You can afford to retire and NOT change anything. You have so much room in your budget, that you can definitely afford to see how it goes first. And then IF -- IF you want to then make changes....do that. And no. You don't need to sell your car. Geez.
But since your psyche is involved in this, also be aware that you may "feel" like you're tight financially...and not actually BE tight financially. You likely won't spend as much as you think. AND , IF you do, you still have a lot of discretionary amounts you can cut back on. Notice I did NOT say "eliminate." I mean costs you can "trim" if you like.
For example, IF you feel you should cut back -- I'd look at the "General Budget for Food, Entertainment, Clothes, Pharmacy & Hobby Lobby $2,100.00." allocations. There's got to be room in there. Break that down. Food/Entertainment don't belong in the same category ad Pharmacy....and hobbies.
That aside: I find some of the suggestions here mind boggling.
The same person who says quit this week and fly to Maui next month....also suggests -- knowing your cash savings is "only" 60K that you pay off your 58K -- 2.5% -- mortgage.
I'm telling you: Some internet advise is just so wrong. IMO
Quote:
Originally Posted by A New Day
....
Your interest rate is so low that you can get a CD for higher than that rate!
Last edited by selhars; 11-21-2022 at 10:09 AM..
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