Pay Off Mortgage?

[IVE GOTTA PACKAGE 4U]

I can only imagine the value of his home increased by 50% or more over the last 4 years also. Timing dictates most big decisions.

Well if he has a million dollars in his retirement plan he can take out 3% and still It grow

 

[MassWineGuy]

These days one million is the new half million.

 

[Lates]

I feel strongly that I should consult with a fee-only financial planner. Depending on the fee.

If you have 401k with fedex look into talking to someone at vanguard it’s a service they offer not sure if there is a fee.

 

[bacha29]

Should we pay off our mortgage before retiring? My wife is retiring fully by August. I’ll keep working another couple of years or so, depending on how awful Express gets.

Payoff balance: $116,700
Monthly payment: $1,635 (increases periodically)

Current retirement funds: approx. $1-million, not including Social Security.

Can't tell you what to do but one thing comes in mind.....The condition, of your roof. boiler, water heater and major appliances.
Now they might still work but if they're all beyond their projected lifespan might be a good move to replace those before you do anything else.

 

[Red Headed Stranger]

Good point.

CD ladder?

I’m 69, so taking SS at 70 plus is probably a given.

You are already beyond what is considered "full retirement age," so you can collect Social Security and work without being penalized for going "over the earnings limit." Part of your Social Security will probably be taxed for federal tax purposes (depending on your total income) and may or may not be taxed at the state level, depending on what state you live in.

 

[59 Dano]

You can get 4% with just a savings account at some banks. No reason to pay off a 3% loan.

Carrying a >$100k debt for the sake of a net 1% gain. Pass.

 

[59 Dano]

Why would you prepay your 2.99% loan (to save interest) when that money could easily earn over 5% in a CD?

I sure as hell would. It's only a 2% net gain and you're still carrying a six figure debt. The CD usually is usually for a locked in period and you're likely (I'm assuming here; I don't use CD's) to be hit with a penalty if you make a withdrawal before the end of the term.

I've never met anyone who regrets owning a home free and clear but I've known a few who wish they'd paid theirs off when they had the chance.

 

[59 Dano]

Should we pay off our mortgage before retiring? My wife is retiring fully by August. I’ll keep working another couple of years or so, depending on how awful Express gets.

Payoff balance: $116,700
Monthly payment: $1,635 (increases periodically)

Current retirement funds: approx. $1-million, not including Social Security.

If there aren't some tax implications for doing so, and the remainder of your retirement funds+SS were enough to provide you with the standard of living you need, I'd do it if it was me.

One way to look at it is how would you feel if you had your house paid off and your current retirement funds were $900,000? If you felt comfortable retiring in that circumstance then that's not much different than paying off your mortgage now. Find a finance nerd to run the numbers for you.

 

[It will be fine]

Carrying a >$100k debt for the sake of a net 1% gain. Pass.

That’s just bad math.

 

[silenze]

That's the wife's money.
This dude is 69 and pt at FedEx.
He ain't never paying off that house

Well if he has a million dollars in his retirement plan he can take out 3% and still It grow

 

[MassWineGuy]

That's the wife's money.
This dude is 69 and pt at FedEx.
He ain't never paying off that house

I’m so glad my wife still likes me.

 

[Spam]

Age 62 may or may not be a good idea

The break even point is 15 plus years

Tell me when you’re going to die?

 

[IVE GOTTA PACKAGE 4U]

Tell me when you’re going to die?

Nobody knows that answer

 

[IVE GOTTA PACKAGE 4U]

That's the wife's money.
This dude is 69 and pt at FedEx.
He ain't never paying off that house

Or maybe she should take a little out so she will have a lower RMD

 

[AB831]

That’s just bad math.

He’s not very bright.

 

[DriverNerd]

I sure as hell would. It's only a 2% net gain and you're still carrying a six figure debt. The CD usually is usually for a locked in period and you're likely (I'm assuming here; I don't use CD's) to be hit with a penalty if you make a withdrawal before the end of the term.

I've never met anyone who regrets owning a home free and clear but I've known a few who wish they'd paid theirs off when they had the chance.

That's a guaranteed return of 2% over the life of the CD. It wouldn't matter if your money was locked up in one because if you used the money to pay off the loan the money would be gone entirely which is no different. I get the sentiment of being debt free, but put that feeling aside and it's a no brainier.

 

[59 Dano]

That’s just bad math.

Paying 3 cents per dollar to get a 4 cent return. Free money!!!

 

[It will be fine]

Paying 3 cents per dollar to get a 4 cent return. Free money!!!

Dave Ramsey style of handling finances is for idiots that don’t understand how debt works. That’s what you are advocating. Someone sitting on enough cash to pay off their house doesn’t need to follow that path. They can do better things with the cash.

 

[59 Dano]

That's a guaranteed return of 2% over the life of the CD. It wouldn't matter if your money was locked up in one because if you used the money to pay off the loan the money would be gone entirely which is no different. I get the sentiment of being debt free, but put that feeling aside and it's a no brainier.

You have the ability to take whatever the mortgage payment was and put it toward something far more rewarding than a CD while eliminating all risk that comes with carrying a mortgage. The allure if you're getting a net return of 7% or more is understandable, but man, 2%? For me that'd be like driving out of my way to save a few cents on gas.

 

[!Retired!]

How old are you and your wife?
This is assuming you're 59.5+. If you decide to take money out of your 401 or IRA, it'll count as income for the year and you 'll have to pay taxes on it....assuming neither of those is a ROTH. That will negate any benefit you have with a 2.99 interest rate. You can send an extra payment, or a principle only payment, at the end of the year. You'll always have enough in your 401/IRA n case of emergency.