# Retiring early March 1 of 2019 .Pay off house or continue house payments?



## cattzee (Oct 28, 2018)

Have googled this extensively online and most retirement advice say to pay off your house when you retire. Husband moved frequently with his job so we never got a home paid for.Approx payoff is 143,000. We owe 20 years on it yet.We could probably sell it for 235,000 or more depending on the market. We can afford to pay it off and we expect a tax hit but not too bad since he is only working the first 2 months of 2019. We plan to stay in it as long as we can.We are both in pretty good shape as well. We have made the major improvements the last couple of years as in new roof,remodeling inside,new flooring etc.All that is paid for. Sooo pay off house so its just a done deal? We are leaning to just paying it off.

Thanks for any tips.


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## bingo (Oct 28, 2018)

i'd sell...and...downsize


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## Trade (Oct 28, 2018)

I say go with the way you're leaning and pay it off if you can afford to. Debt free is the way to go IMO.


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## ronaldj (Oct 28, 2018)

debt free into retirement is the only way to go


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## Manatee (Oct 28, 2018)

Paid off is beautiful!


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## Harold Hayden (Oct 28, 2018)

cattzee said:


> Have googled this extensively online and most retirement advice say to pay off your house when you retire. Husband moved frequently with his job so we never got a home paid for.Approx payoff is 143,000. We owe 20 years on it yet.We could probably sell it for 235,000 or more depending on the market. We can afford to pay it off and we expect a tax hit but not too bad since he is only working the first 2 months of 2019. We plan to stay in it as long as we can.We are both in pretty good shape as well. We have made the major improvements the last couple of years as in new roof,remodeling inside,new flooring etc.All that is paid for. Sooo pay off house so its just a done deal? We are leaning to just paying it off.
> 
> Thanks for any tips.



Depends on how much you would save on interest of the loan v. interest on savings/taxes on withdrawals. Just because most will recommend paying off the mortgage as important... minimizing the tax bite should be the key factor in making that decision, imo, even if it takes 5~10 years or even 20.


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## Knight (Oct 28, 2018)

If the tax bite is because you now use mortgage payment interest why not hope mathjak weighs in with a more well informed opinion. Seriously he does know a lot about taxes. He might ask some question that are relevant to your particular situation. 

Like most here owning with no mortgage payments works for us. Without knowing your tax concern, if where you live is the last place you want to own or move away from  my opinion is based on knowing where we wanted to spend our retirement years.


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## Olivia (Oct 28, 2018)

I agree with the majority that it's best to retire without a mortgage. However, I remember reading the following article in last week's Sunday's newspaper that looks at both sides of the question. 

https://www.apnews.com/9adea522f9064a1f9b38c7ab53c16e4a


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## Camper6 (Oct 28, 2018)

There is one thing I noticed.  You plan to stay in the house.  So why not enjoy your retirement for awhile and see how it goes?

You don't want to be cash strapped and you have the equity in the house.  

Then get some good advice from a tax professional on the best way to handle your retirement.

You really don't know how your retirement is going to go financial ways until you try it.

You may want to do some travelling or move to a different climate.


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## cattzee (Oct 28, 2018)

Interesting article


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## Buckeye (Oct 28, 2018)

do whatever lets you sleep well at night.


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## Aunt Bea (Oct 29, 2018)

Hoot N Annie said:


> do whatever lets you sleep well at night.



I agree!

Talk to a professional that is familiar with your financial situation and then do what is best/comfortable for your personal situation.

For me that means always being debt free, a cash cushion and conservative investments.  I'm always willing to sacrifice financial returns for bulletproof security.

Good luck!


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## terry123 (Oct 29, 2018)

Going into retirement I would feel better being debt free, but that's me.


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## mathjak107 (Oct 29, 2018)

.





Knight said:


> If the tax bite is because you now use mortgage payment interest why not hope mathjak weighs in with a more well informed opinion. Seriously he does know a lot about taxes. He might ask some question that are relevant to your particular situation.
> 
> Like most here owning with no mortgage payments works for us. Without knowing your tax concern, if where you live is the last place you want to own or move away from  my opinion is based on knowing where we wanted to spend our retirement years.


Each situation is different . It depends on a lot of things . It can suck to be house rich and cash poor in a situation that requires liquidity . I prefer to keep the mortgage going ,invest elsewhere and know I have all this extra money I did not bury in the house .

once money goes in you can not get it out ,you can only borrow more money and pay interest on top of borrowing it . So you can never access your own money without loans . Even a reverse mortgage is a loan . 

there is usually a difference between what feels good and what makes more financial sense.

it is like we rent and I can buy a co-op for cash and save 6k a year in expenses compared to renting . But when I figure in we will give up 18k in income on the money now in the co-op our cash flow will take a 12k hit by buying. So it really would not be a better deal for us since cash flow is king in retirement . More equity I can’t spend does nothing for us. 

I cant sell off the living room or spend it at the super market


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## cattzee (Oct 29, 2018)

Thanks for the replies. We will seek out advice for sure. One thing we wondered about is the money we use to pay the house off will no longer be making us money once we pull it... of course if we would of been smart we should of been paying it down over the years. Hindsight is always 20/20 .Ive read where some pay their homes off in chunks and spread it over a couple of years. I definitely appreciate the comments.


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## cattzee (Oct 29, 2018)

I run across that in some of my googling about being cash poor. I recall running into that when we were first married. We thought ohhh this place is wonderful with the higher payments and then found we couldnt even afford to even get out of the driveway.This gives us an opportunity to pause. I have friends who opted to pay interest only in their senior years but they have lived in the same place 25 years so their interest isnt much at all. I figured that and it was double what the principal is. Makes a difference how long you have paid on the home.


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## mathjak107 (Oct 29, 2018)

it makes a difference in what the extra money not dumped in to the house is doing .


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## Uptosnuff (Nov 10, 2018)

Starting in 2012, hubby and I started really paying down our mortgage.  Double payments when we could, but always more than our normal house payment every month.  We are down to around $9,000 now and will have it totally paid off next year.  Due to circumstances, we can't pay as much now on our house payments as we were doing, but it doesn't matter as much now.  I can't wait until it is finally paid off.  I am tired of giving the banks all that interest.  It makes me sick to think how much we have given banks over the years.  For that reason alone, I would advise to pay off your mortgage as soon as possible.  I will retire in a little less than three years and knowing I won't have a house payment hanging over my head makes the retirement all that more exciting.


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## mark55 (Nov 30, 2018)

i payed off my house, in may, and retired in feb, saved 6 to 8 months house payments, the taxes I encountered for early withdrawal (401) was a lot less than the money the bank would make off another 15 years of mortgage payments


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## mathjak107 (Dec 1, 2018)

you may have saved the interest but if that money in the 401k was properly invested it would have covered the interest plus likely gave you  more money as well  . that could be a very myopic view as well as an even worse deal with taxes and penalties . i am not saying it is wrong for YOU .  but it is far from a fair comparison to the actual scenario just looking at the interest without the flip side of what is given up  by sinking the money in to the house .

this is akin to the delaying ss discussions where people look at the increases without calculating the fact they will be spending down invested assets to delay , giving up checks , giving up spousal and giving up protection from medicare increases .  as you see just looking at one aspect would not be a correct evaluation .


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## NewRetire18 (Dec 1, 2018)

So many choices. 
We had the choice to invest or pay off our current mortgage. Since we don't have $$ enough to do both, we created a third option: to purchase a new property and build our retirement place there instead. It will be finished in spring, then we will sell our primary house and be totally out of debt. So far, this is working out to be the best compromise, and allows the majority of our retirement income to be discretionary.


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## Tommy (Dec 1, 2018)

The first financial advisors we spoke with gave us very bad financial advice.  To be generous, they may not have been able to fully understand our then-current financial situation or our retirement goals.  We passed on them and found a more helpful advisor.  When you speak with financial advisors, be SURE that you fully understand and agree with their way of thinking.

We sold our three story house, which was far too large for us, and were able to use our equity to pay cash for a comfortable, smaller home offering one-floor living in our location of choice.  That was the right decision for us.  We have sufficient income and long term savings to see us through our remaining years.

What was a surprise was the cost of medical insurance.  Medicare B costs around $135 per month for each of us and doesn't cover all that much, so we needed a gap policy.  We essentially traded our old mortgage payment for total health insurance costs of around $1000 per month.  Exasperating!

As noted above, the best plan for you depends on your own situation.  Be sure you have a detailed budget for retirement that factors in ALL expenses and allows for reasonable contingencies.

Best of luck to you in your retirement.


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## mathjak107 (Dec 1, 2018)

Tommy said:


> The first financial advisors we spoke with gave us very bad financial advice.  To be generous, they may not have been able to fully understand our then-current financial situation or our retirement goals.  We passed on them and found a more helpful advisor.  When you speak with financial advisors, be SURE that you fully understand and agree with their way of thinking.
> 
> We sold our three story house, which was far too large for us, and were able to use our equity to pay cash for a comfortable, smaller home offering one-floor living in our location of choice.  That was the right decision for us.  We have sufficient income and long term savings to see us through our remaining years.
> 
> ...




i loooove medicare  and say thank god we made it here . we were paying 7000 each for a silver plan with a 4500 deductible for each of us .  medicare and our supplement is a fraction of what we paid . plus medicare premiums don't go up more than our ss increase .

that never was the case working when premiums sky rocketed whether you got a raise or not


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## MeAgain (Dec 1, 2018)

cattzee said:


> Have googled this extensively online and most retirement advice say to pay off your house when you retire. Husband moved frequently with his job so we never got a home paid for.Approx payoff is 143,000. We owe 20 years on it yet.We could probably sell it for 235,000 or more depending on the market. We can afford to pay it off and we expect a tax hit but not too bad since he is only working the first 2 months of 2019. We plan to stay in it as long as we can.We are both in pretty good shape as well. We have made the major improvements the last couple of years as in new roof,remodeling inside,new flooring etc.All that is paid for. Sooo pay off house so its just a done deal? We are leaning to just paying it off.
> 
> Thanks for any tips.



Congratulations!


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## mathjak107 (Dec 1, 2018)

one problem with making extra payments to pay off the house and then channeling more money in to investing is time is your friend .

the longer your let larger amounts of money grow the less  picking a good time frame matters . 

many wait until the house is paid  by channeling extra money in to the house rather than their investments   and they inadvertently take away time as a friend .   now you need to hope yours is not another lost decade . on the other hand the mortgage is fixed and unaffected by time . so  it is usually not a good idea to channel extra dough into the house  if you intend to beef up investments .


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## ray188 (Dec 1, 2018)

Hoot N Annie said:


> do whatever lets you sleep well at night.


That is the most intelligent post I have ever seen. That is all that matters.


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## cattzee (Dec 1, 2018)

I appreciate all the replies and considerations given!


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## mathjak107 (Dec 2, 2018)

ray188 said:


> That is the most intelligent post I have ever seen. That is all that matters.



while i agree ,  feeling good and financial well being don't always  coincide .

people end up having retirements that are less than all the time because they plan around what feels good rather then what makes financial sense  .

then those choices hurt them .

so you really need to give things good "logical thought" ..

our friends  put a load of money in to their house  accelerating payments so they could feel good .  well that left their income producing ability from investments way to light and their hopes of playing catch up were shattered when they hit the lost decade .

feeling good went and boxed their investing into being dependent on a much shorter time frame , which is never good .

so when it came time to pull the plug and retire expenses , especially real estate taxes went up so much they had no choice but to leave their family and friends and move to a a much lower cost area .

as i try to convey over and over , cutting costs is only the same as growing income until there is nothing left to cut . then the importance of growing income  gets highlighted front and center . so you need both cost cutting and the ability to grow income.   going to heavy one way or another is not good .   so it is usually best to balance things out and don't accelerate feeling good about the house until  the investment side of things is in place too


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## fmdog44 (Dec 5, 2018)

This is a very imortant issue because of your ages. I would seek the help if a certified financial planner. Enjoying your retirement is the most important issue. You don't want to add any burdens in your life now.


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## Linda (Dec 6, 2018)

My husband got in and worked a lot to pay our house off a few years before he retired.  We have never regretted it.  But only you can decide what is best for you.


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## mathjak107 (Dec 6, 2018)

fmdog44 said:


> This is a very imortant issue because of your ages. I would seek the help if a certified financial planner. Enjoying your retirement is the most important issue. You don't want to add any burdens in your life now.



i agree on letting a good planner review the whole situation  and see what is the best way . like i said above doing what feels good vs what is best for you financially or makes the most financial sense  usually do not coincide .


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## wmc1000 (Dec 10, 2018)

We kept our mortgage when strating retirement because it was a 2.75% interest rate. Still continue to pay extra each month and if we get "extra" cash I send it in as additonal principal. We would not withdraw from our retirement accounts unless the interest rate was at 5% or more.  Were on target to pay off our mortgage sometime in 2021 which will be 5 years into retirement.


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## MeAgain (Jan 28, 2019)

I'd lean more to the paying off the house rather than investments in todays unpredictable markets. 
 I remember in 2008 my friend lost a big chunk of her 401 and her boyfriend lost $70,000 in one swipe. Wall Street can be tricky and precious metals pricey and also unpredictable.


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## mathjak107 (Jan 28, 2019)

MeAgain said:


> I'd lean more to the paying off the house rather than investments in todays unpredictable markets.
> I remember in 2008 my friend lost a big chunk of her 401 and her boyfriend lost $70,000 in one swipe. Wall Street can be tricky and precious metals pricey and also unpredictable.



markets never lost their money since the markets recovered and tripled . bad investor behavior lost their money ....

i have been an investor for more than 30 years . i don't ever remember any moment it was a good time to invest .. we were always waiting for some disaster or black swan to strike ..


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## Butterfly (Jan 29, 2019)

mathjak107 said:


> markets never lost their money since the markets recovered and tripled . bad investor behavior lost their money ....
> 
> i have been an investor for more than 30 years . i don't ever remember any moment it was a good time to invest .. we were always waiting for some disaster or black swan to strike ..



When I was looking forward to retirement, I made the decision to just continue paying off the house in the normal course (it was an old mortgage with very low interest) and put the money I would have used to pay off the house into investments.  I eventually paid the last payment on the house a few years before I retired and made more on the investments than I would have saved in interest by paying off the house.

Putting all my eggs into the house just didn't feel right to me.  And I didn't really lose any money in the 2008 mess because I just gritted my teeth and rode it out.  I think most of the people who lost a lot of money were people who panicked and sold while the market was down.


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## mathjak107 (Jan 29, 2019)

Butterfly said:


> When I was looking forward to retirement, I made the decision to just continue paying off the house in the normal course (it was an old mortgage with very low interest) and put the money I would have used to pay off the house into investments.  I eventually paid the last payment on the house a few years before I retired and made more on the investments than I would have saved in interest by paying off the house.
> 
> Putting all my eggs into the house just didn't feel right to me.  And I didn't really lose any money in the 2008 mess because I just gritted my teeth and rode it out.  I think most of the people who lost a lot of money were people who panicked and sold while the market was down.



yep , channeling to much in to the house on an accelerated basis may feel good but usually it is not the best financial choice ...


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## Sue777 (Feb 14, 2019)

I went to see two different financial planners when I was starting to think about retiring, didn't like the first one, but really liked the second one.  He seemed very down-to-earth and more in tune with people at my income level.  I think the first guy was accustomed to dealing with people who where wealthy so his outlook and goals didn't match mine.

Anyway, I've met with the second adviser 3 times now and even though I always thought I would/should take a big chunk of 401(k) money to either pay off or pay down the mortgage, he has convinced me that this was probably NOT the best decision for me and my husband.   Our mortgage interest rate is only 3% and the monthly payments aren't exorbitant, so he thinks it would be advisable to keep investing my money and paying my monthly mortgage.    I have to admit, in my case, it DOES make sense.
Sue


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## Keesha (Feb 14, 2019)

I have no idea but this is a very informative thread


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## treeguy64 (Feb 14, 2019)

Sue777 said:


> I went to see two different financial planners when I was starting to think about retiring, didn't like the first one, but really liked the second one.  He seemed very down-to-earth and more in tune with people at my income level.  I think the first guy was accustomed to dealing with people who where wealthy so his outlook and goals didn't match mine.
> 
> Anyway, I've met with the second adviser 3 times now and even though I always thought I would/should take a big chunk of 401(k) money to either pay off or pay down the mortgage, he has convinced me that this was probably NOT the best decision for me and my husband.   Our mortgage interest rate is only 3% and the monthly payments aren't exorbitant, so he thinks it would be advisable to keep investing my money and paying my monthly mortgage.    I have to admit, in my case, it DOES make sense.
> Sue



 My ex had a financial adviser.  She allowed this person to strongly influence how she set up her finances:  She went bankrupt, got her home foreclosed, and now lives in a trailer!  That is the absolute truth.  Living debt-free, as I do, is the way to go.


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## mathjak107 (Feb 15, 2019)

obviously she couldn't afford the house to pay it off in the first place ...  that is not the same thing as the question here ..

the person has the money to pay off the house . the question is should they tie up more money in the house or diversify the extra money in to other assets ...

it is no where near the situation you are describing where there is no choice to make . you need money to have choices


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## treeguy64 (Feb 15, 2019)

I paid off my houses as soon as I could, many years ago. Living debt free is the way to go, as I posted, previously. Investments may go south, and see you lose a bundle. Once you pay off something, it's yours, yearly taxes notwithstanding. I only posted about my ex to show that financial planners can be full of it.


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## Don M. (Feb 15, 2019)

treeguy64 said:


> I paid off my houses as soon as I could, many years ago. Living debt free is the way to go, as I posted, previously. Investments may go south, and see you lose a bundle. Once you pay off something, it's yours, yearly taxes notwithstanding. I only posted about my ex to show that financial planners can be full of it.



I fully agree that living debt free is the ONLY way to go.  Fortunately, I had parents who loathed debt, and their attitude rubbed off on me.  We made our last house and car payments somewhere back in the mid-1980's, and used that money to start saving and investing for retirement...IRA, etc...Luckily, we realized that we, too, would some day grow old, and we had better plan for it.  I talked to 3 or 4 "financial advisors", and came away with the feeling that I could get better advise by just reading a diverse selection of good articles in publications such as the Wall Street Journal, Investors Business Daily, etc.,etc.  "Self Education" is far more valuable than ANY "advisors, IMO.  

I am constantly amazed at the number of retirees who are still deeply in debt, and have only a paltry sum set aside for emergencies, etc.  I guess they figured they would never grow old.  We're not rich, but if we get bored, and decide to go the the bank and pull out some cash, and head for the casino, it isn't going to impact us.  We're sure glad that we "saw the light" decades ago.


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## mathjak107 (Feb 16, 2019)

treeguy64 said:


> I paid off my houses as soon as I could, many years ago. Living debt free is the way to go, as I posted, previously. Investments may go south, and see you lose a bundle. Once you pay off something, it's yours, yearly taxes notwithstanding. I only posted about my ex to show that financial planners can be full of it.




ending up house rich and cash poor because you ACCELERATED dumping your extra money in to the house at the expense of growing other assets is not a good financial idea .. the longer you give market investments the `less pressure you put on  time frame .

having a nice amount of savings from investments can add a lot more safety and security to a plan then having  to much dumped in to  house where it is trapped .

2008 saw helkocs and lines of  credit closed and killed off at the worst possible time and now all the excess funds are trapped .

you need a balance   , pay off the house at the scheduled rate of pay off and don't keep feeding excess cash in to it in my opinion .  there is no extra security having  a load of money trapped in the house vs the normal rate in the house and those addiional funds working for you diversified in other areas  that are liquid ... a nice diversified portfolio that includes bonds as well will not be selling stock in a down turn . a typical 50/50 mix can support  many many years of draw if retired  on bonds and cash ...


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## NewRetire18 (Feb 16, 2019)

What you said only works if you have a large portfolio, not a small one. It's all a personal thing.


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## mathjak107 (Feb 16, 2019)

not true at all ... you would be more secure paying off the house at the regular pace and holding on  to more of your money if   that was the case  so you have  more liquidity available to you if that was the case ..

you are trying to pass off what might feel good mentally as something that makes smart financial sense and the two rarely go hand in hand


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## treeguy64 (Feb 16, 2019)

mathjak107 said:


> ending up house rich and cash poor because you ACCELERATED dumping your extra money in to the house at the expense of growing other assets is not a good financial idea .. the longer you give market investments the `less pressure you put on  time frame .
> 
> having a nice amount of savings from investments can add a lot more safety and security to a plan then having  to much dumped in to  house where it is trapped .
> 
> ...



Bah! There is total security in owning, outright, where you live! The key is to know when to say, "Enough!," when you're in the market, and then take the proceeds from sales, and pay off what you owe on your house(s), provided you are happy with where you live. I have known older folks who went over and over their investments, each day, in an obsessive way, and then died, failing to ever derive any real enjoyment from what they invested in, other than the act of investing! Absurd, as I see it, although their heirs were sure glad they did what they did. If you can afford to pay off all outstanding debts with stock proceeds, do it! The sooner, the better. I speak from (very happy) experience. The only valid point in the post I responded to is that, yes, you must be able to meet your day to day expenses (ie. not be cash poor), after you pay off your house. If you can't, well, you need a Plan B.


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## treeguy64 (Feb 16, 2019)

mathjak107 said:


> not true at all ... you would be more secure paying off the house at the regular pace and holding on  to more of your money if   that was the case  so you have  more liquidity available to you if that was the case ..
> 
> you are trying to pass off what might feel good mentally as something that makes smart financial sense and the two rarely go hand in hand



The operative word, in your ramblings, is "rarely." When you can pay off your house, and still live the good life, do it! It's foolish to pay that interest on a long-term loan, no debate possible.


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## NewRetire18 (Feb 16, 2019)

mathjak107 said:


> not true at all ... you would be more secure paying off the house at the regular pace and holding on  to more of your money if   that was the case  so you have  more liquidity available to you if that was the case ..
> 
> you are trying to pass off what might feel good mentally as something that makes smart financial sense and the two rarely go hand in hand



Ok, then I'll pose a question. I have a mortgage of $1870 per month, and I have $20K left on the mortgage principle, which is about 1.4 years of payments. I have $20K in hand. What can I invest in with that 20K which will pay me $1800 per month of growth during that 1.4 years?


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## mathjak107 (Feb 16, 2019)

wrong calculation , shame on you  ... all you are saving is the interest on that . you would be prepaying most of that mortgage payment  which is principal that has to be paid regardless ,so you are not getting 1800 a month ..with 1.4 years left the interest saved is on 20k and is  likely less than 800    bucks a year with a portion of that coming back if you can itemize .. in short hardly worth it  with 1.4 years left  .  sorry to blow it for you

you can likely beat that over the longer term in an index fund by 2 to 3x


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## Sue777 (Feb 16, 2019)

Loving this thread because I would bet that the majority of us have grappled with or are still grappling with these two different schools of thought.   Yes, each person's situation and financial picture is unique and has to be looked at as such, but still, regardless of how much you made during your life, how much you stashed away, how much you've put into your mortgage, etc. there is STILL going to be the struggle of what to do with however small or large your existing and future income is.    I'm there right now.   And since I've got an interest rate of 3.8% on the mortgage it makes sense for me to keep my money in my 401K and IRA's and pay the monthly mortgage rather than pay off the house.   Still wonder if that's the RIGHT thing to do - I think it is, but such a major life decision always comes with a certain amount of fear and apprehension.    Good luck to us all!    
Sue


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## Aunt Bea (Feb 16, 2019)

Sue777 said:


> Loving this thread because I would bet that the majority of us have grappled with or are still grappling with these two different schools of thought. Yes, each person's situation and financial picture is unique and has to be looked at as such, but still, regardless of how much you made during your life, how much you stashed away, how much you've put into your mortgage, etc. there is STILL going to be the struggle of what to do with however small or large your existing and future income is. I'm there right now.* And since I've got an interest rate of 3.8% on the mortgage it makes sense for me to keep my money in my 401K and IRA's and pay the monthly mortgage rather than pay off the house. **Still** wonder if that's the RIGHT thing to do *- I think it is, but such a major life decision always comes with a certain amount of fear and apprehension. Good luck to us all!
> Sue



That's what I would do if I was in your situation!

These days I would also consider setting up a GoFundMe account! layful:nthego:

Enjoy your retirement!


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## Camper6 (Feb 16, 2019)

ray188 said:


> That is the most intelligent post I have ever seen. That is all that matters.



Sorry. When it comes to finances, the gut feeling isn't always the best option.

In retirement money isn't everything, it's the only thing.

It's funny. People have no problem owing money on a car but they have a problem owing money on a house?


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## Camper6 (Feb 16, 2019)

Sue777 said:


> Loving this thread because I would bet that the majority of us have grappled with or are still grappling with these two different schools of thought.   Yes, each person's situation and financial picture is unique and has to be looked at as such, but still, regardless of how much you made during your life, how much you stashed away, how much you've put into your mortgage, etc. there is STILL going to be the struggle of what to do with however small or large your existing and future income is.    I'm there right now.   And since I've got an interest rate of 3.8% on the mortgage it makes sense for me to keep my money in my 401K and IRA's and pay the monthly mortgage rather than pay off the house.   Still wonder if that's the RIGHT thing to do - I think it is, but such a major life decision always comes with a certain amount of fear and apprehension.    Good luck to us all!
> Sue



You can't be too far off with that decision.  It's the health issue really that is the problem.  I know many seniors who ended up having to sell the house and move into an assisted living home.


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## mathjak107 (Feb 16, 2019)

Camper6 said:


> Sorry. When it comes to finances, the gut feeling isn't always the best option.
> 
> In retirement money isn't everything, it's the only thing.
> 
> It's funny. People have no problem owing money on a car but they have a problem owing money on a house?


They also don’t calculate properly and don’t realize they are not saving the mortgage payment ... they only save some interest on the loan balance ...it is not even all the interest either since if they itemize they can get a portion back ...the closer to the end of the mortgage the less it pays to acccelerate the payments


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## Sue777 (Feb 16, 2019)

Camper6 said:


> You can't be too far off with that decision.  It's the health issue really that is the problem.  I know many seniors who ended up having to sell the house and move into an assisted living home.



Yes, I'm fairly comfortable with continuing to pay the mortgage - it's a fixed rate so there are no surprises.    Health issues?   Ugh.   The great unknown.    I have a couple of chronic, yet non-life threatening ones that will keep me on medications for the rest of my life, but God only knows what the future holds in store for me and my husband.   Since there is no way to know that, we can only hope for the best.
Sue


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## mathjak107 (Feb 17, 2019)

If all the investments are fully funded then  depending how far in to the mortgage you are dumping excess cash in to it may or may not be a good idea...a house is a one way trip.. the money goes in but it can’t come out without taking loans and yes a reverse mortgage is a loan ..

there Can be a lot more security in liquid cash when times are tough then sitting inaccessible in the house....you can’t spend the living room unfortunately


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## Butterfly (Feb 17, 2019)

mathjak107 said:


> If all the investments are fully funded then  depending how far in to the mortgage you are dumping excess cash in to it may or may not be a good idea...a house is a one way trip.. the money goes in but it can’t come out without taking loans and yes a reverse mortgage is a loan ..
> 
> there Can be a lot more security in liquid cash when times are tough then sitting inaccessible in the house....you can’t spend the living room unfortunately



AND I know plenty of people who have been trying to sell their house for months without success, and a couple of others who have been forced to sell at a loss because they had to have the money.  

People forget that no matter what they've put into a house, the house is only worth what someone is willing to pay you for it.


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## mathjak107 (Feb 18, 2019)

Butterfly said:


> AND I know plenty of people who have been trying to sell their house for months without success, and a couple of others who have been forced to sell at a loss because they had to have the money.
> 
> People forget that no matter what they've put into a house, the house is only worth what someone is willing to pay you for it.



Many people run on myth ,poor math  and poor record keeping .... interest alone can cause the price of the house to cost 2 to 3x the purchase price .

you have so many who don’t realize that housings costs whether you rent or own are one issue ,,, how the money does as an investment is another issue .....you can rent and depending where you live have lower costs living in a one bedroom apartment in a building vs someone supporting a 4 bedroom house with 5 digit taxes so the  costs renting can certainly be lower than owning .... they can also deploy that money in other investments which return 2 to 3x what the house did ..

so NOOOOOOO , renting may very well not be throwing money away , it may very well allow creating far more wealth ...

what clouds the issue is renters are a mixed bag from the very poor to the very wealthy ... if you have no money to buy and no money to invest  you have no choice .... if you are just starting out buying is always better then renting if  your only choice is paying rent in one area or buying in a cheaper area ..

but for those with accumulated assets to invest or buy it is a different picture and renting may allow far greater wealth creation even after accounting for housing costs ..  all cash sales account for 30-40% of all residential sales , so there is lots of people with lots of resources out there who can certainly have choices .


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## mathjak107 (Feb 19, 2019)

NewRetire18 said:


> Ok, then I'll pose a question. I have a mortgage of $1870 per month, and I have $20K left on the mortgage principle, which is about 1.4 years of payments. I have $20K in hand. What can I invest in with that 20K which will pay me $1800 per month of growth during that 1.4 years?




so you never replied  back about your great mis-calculation here


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## TriMoot (Feb 20, 2019)

Ugh...That sounds like exactly what will happen to us.  We have a large house and plan on selling it this spring and downsizing...however, we will most likely wind up with a MUCH smaller house for about the same price we're selling it for!! It's crazy!  The hope was to sell now, and after all the work and improvements we made, we were 'hoping' we could buy the retirement home in cash and have no mortgage!  But it seems like we're either going to have a REALLY tiny home and in a area that we really aren't happy with, or get a decent home and have a small mortgage...sigh.  NOT how I thought it would be.

We have talked about selling, living in our RV, continue to work until my wife gets closer to retirement and/or healthier (heart issues) and THEN hope the housing market has gone down and buy the smaller retirement house.  But..I can't imagine living in the RV in the WINTER here in Spokane, WA. NO THANKS!  No if I could only talk my boss into letting me work "REMOTE" and then coming in once a month or every two months, then that could work.

So difficult to know what to do.  But I'll keep reading and watching these post in hopes that something clicks and I have an ahHAH moment!



Tommy said:


> The first financial advisors we spoke with gave us very bad financial advice.  To be generous, they may not have been able to fully understand our then-current financial situation or our retirement goals.  We passed on them and found a more helpful advisor.  When you speak with financial advisors, be SURE that you fully understand and agree with their way of thinking.
> 
> We sold our three story house, which was far too large for us, and were able to use our equity to pay cash for a comfortable, smaller home offering one-floor living in our location of choice.  That was the right decision for us.  We have sufficient income and long term savings to see us through our remaining years.
> 
> ...


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## Phantom (Feb 22, 2019)

I bought my new home when I was retrenched
Paid cash Not a single cent on interest !!

Started up investing but after a couple years was losing money including paying our financial adviser
Pulled it all out and in bank for long deposit


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## mathjak107 (Feb 22, 2019)

Why would you think that investments are short term deals going in ?


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## retiredtraveler (Feb 23, 2019)

mathjak107 said:
			
		

> .......but for those with accumulated assets to invest or buy it is a different picture and renting may allow far greater wealth creation even after accounting for housing costs ..  all cash sales account for 30-40% of all residential sales , so there is lots of people with lots of resources out there who can certainly have choices .



Do you know where you got that number? I've read this:

_"....The share of cash sales to residential sales continued to trend down, to 21 percent in 2017[1], down from 23 percent in 2016, according to the December 2017 REALTORS® Confidence Index Survey.[2] From 2011 through 2013, the share of cash sales hovered at 31 percent.
_
_ There are fewer cash buyers in the market, with fewer distressed  properties for sale and less interest from investor buyers as home  prices have ramped up steeply since 2012 (61 percent increase in the  median home price of existing homes sold since 2012).....".

_Of course, those numbers may well vary by region.


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## mathjak107 (Feb 23, 2019)

[FONT=&quot]According to CoreLogic’s report, cash sales made up 32.1% of all home sales in 2016, falling 2.2% from 2015’s total. That’s the lowest annual cash sales share since 2007, when cash sales accounted for 27% of all sales..

i think the 2017 numbers were lower and i have not seen 2018 yet ..

but throughout history cash sales represent a healthy portion of transactions [/FONT]


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## ronaldj (Feb 24, 2019)

Let’s say you owe on the house andhave enough retirement coming in to pay along as you enjoy life. YOU get sickall your money goes to doctoring and nothing is left to pay house, bank takes houseyou have no place to live..... House paid off, you give doctors what you can andlive in house-no one can take house if no one is owed on house.


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## mathjak107 (Feb 24, 2019)

ronaldj said:


> Let’s say you owe on the house andhave enough retirement coming in to pay along as you enjoy life. YOU get sickall your money goes to doctoring and nothing is left to pay house, bank takes houseyou have no place to live..... House paid off, you give doctors what you can andlive in house-no one can take house if no one is owed on house.




no , wrong logic ... you still need to afford the house ... you would have just that more in cash if it wasn't buried in the house ..you are trying to make up a situation that really does not have much logic ...you still need money to cover all those expenses .. in fact the longer you own the house the less likely a paid off mortgage may even be a factor compared to all the other expenses over time ..

our first homes in the 70's were 30-35k .. today that paid off mortgage does not represent the utility bills in size.  taxes  may be 8-15k on  that paid off  house 35k  ... so there really is little logic in what you are saying ...there are always expenses that go with a house and over time those expenses can eclipse the mortgage ,   and don't pay the taxes and see how long it stays yours


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## Don M. (Feb 24, 2019)

Mortgage payments....and Any kind of debt...in retirement, can be a real drag on life in retirement, IMO.  A person needs to recognize, when they are young and working, that they, too, will one day get old and retire.  Knowing that, those who are wise begin to save and invest at an early age.  One of the Very Few things our government has done for Seniors is the IRA/401K plans, which if utilized when young, can substantially enhance a retiree's lifestyle.  Social Security barely keeps a person above the poverty levels, and fewer companies, every year, are offering decent pensions....so it is becoming more and more important for individuals to try to prepare themselves for their elder years.  People who wait until they are nearing retirement age before they start saving will probably be in for some disappointment.


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