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re: How many of you retirees still have a home mortgage (purposefully)? What is your mindset?
Posted on 7/17/21 at 3:43 pm to tigersfan1989
Posted on 7/17/21 at 3:43 pm to tigersfan1989
quote:
some people use holding a mortgage as a sub for bond allocation
Substitute? The bond pays you vs. you pay the mortgage, so how is it a substitute?
1
Posted on 7/17/21 at 4:38 pm to Turf Taint
quote:
Substitute? The bond pays you vs. you pay the mortgage, so how is it a substitute?
Say at retirement you have a 50/50 stock to bond allocation and you also decide to keep your mortgage. The 50% bond allocation is being held while you have a 2.5% mortgage which to me doesn’t make much sense. Why wouldn’t you just payoff the mortgage instead of trying to beat a small spread between a mortgage and a bond. Now if you put all your retirement funds in 100% stock allocation and keep a fixed 2.5% mortgage you are betting on beating that 2.5% rate with your stock allocation.
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