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Started By
Message
Do you plan to have a mortgage on your primary home for part/all of your retirement?
Posted on 11/11/22 at 4:34 pm
Posted on 11/11/22 at 4:34 pm
If Y, please share your thinking.
In particular, interested in how you plan to de-risk your finances covering essential expenses, including the mortgage?
In particular, interested in how you plan to de-risk your finances covering essential expenses, including the mortgage?
29
Posted on 11/11/22 at 5:22 pm to Turf Taint
Not having a mortgage was a must before retirement for us
Posted on 11/11/22 at 5:48 pm to Turf Taint
No. I paid mine off when I was 35.
Posted on 11/11/22 at 5:59 pm to Turf Taint
I was adamant about it and have a 10 year plan to pay it off but now with savings accounts paying paying more than my mortgage I started diverting those extra funds into those accounts.
As long as that remains the case im not paying off early
As long as that remains the case im not paying off early
Posted on 11/11/22 at 6:16 pm to Turf Taint
No, I paid my house off when I was 32. I do borrow against it for investment property for flips/rentals though.
Posted on 11/11/22 at 6:20 pm to Billy Blanks
I don’t really care one way or another. I prefer not having one in retirement because it requires greater cash flow but it isn’t a requirement to financial independence.
Posted on 11/11/22 at 7:30 pm to Turf Taint
We build out retirement home last year. I hope to retire in 2 years. I have a 15 year mortgage at 2.25%. I have savings to cover it for 2 years, then will let my SS check pay it the rest of the way.
If for whatever reason SS isn't available, I have enough in retirement (or I did before Biden) to pay it without worrying about it.
If for whatever reason SS isn't available, I have enough in retirement (or I did before Biden) to pay it without worrying about it.
Posted on 11/11/22 at 8:55 pm to Billy Blanks
Y’all must have bought $200k houses
This post was edited on 11/11/22 at 8:56 pm
Posted on 11/11/22 at 10:44 pm to Fox McCloud
quote:
Y’all must have bought $200k houses
Close, 250k in 2002. Worth about 500k now.
Y'all mad I paid my house off early? Probably hurt myself on the 401k front in the process. Felt good in the moment, tho.
Everybody talks about the amount you can make in other investments compared to mortgage interest...but many of those arguments ignore risk.
Posted on 11/11/22 at 10:45 pm to Turf Taint
No. Want the peace of mind to not have debt in retirement
Posted on 11/11/22 at 10:47 pm to Turf Taint
Having a mortgage can't be part of your retirement plan. If you're carrying a mortgage past 65, really 60ish, you're living life dangerously IMO.
Posted on 11/11/22 at 10:49 pm to Turf Taint
Yes, bought house and retired early this year (45 yo). No plan to pay off mortgage sooner (30 yr/3.75%). Funded sizable down payment and closing w/ a pledged asset line with adjustable rate currently 5.3% (1.55% + SOFR) may start paying that down. It was under 2% when I took it out earlier this year. Doing so kept capital fully invested and avoided massive tax bill if I had sold investments to fund down payment in last higher income working year.
Pension covers mortgage and most expenses. Will augment spending as needed with modest withdrawals from investments well below 4% safe withdrawal rate.
Will pay much lower taxes on withdrawals if I'm not working. I'll aim to keep withdrawals within the zero LTCG bracket. If I pull more than that to pay mortgage or pledged asset line aggressively, I'll get hit with 15% LTCG on the excess so doesnt make much sense.
Pension covers mortgage and most expenses. Will augment spending as needed with modest withdrawals from investments well below 4% safe withdrawal rate.
Will pay much lower taxes on withdrawals if I'm not working. I'll aim to keep withdrawals within the zero LTCG bracket. If I pull more than that to pay mortgage or pledged asset line aggressively, I'll get hit with 15% LTCG on the excess so doesnt make much sense.
This post was edited on 11/11/22 at 11:02 pm
Posted on 11/11/22 at 10:59 pm to Turf Taint
Fukno
Posted on 11/12/22 at 12:31 am to Turf Taint
Not sure. Paid off ours at 40. Plan to sell and move after retirement.
Whether the retirement home is paid for or mortgaged will depend on rates at the time. If low, finance and hope that when I die the bank will say, “Damn. That guy owed us a lot of money.”
Whether the retirement home is paid for or mortgaged will depend on rates at the time. If low, finance and hope that when I die the bank will say, “Damn. That guy owed us a lot of money.”
Posted on 11/12/22 at 4:46 am to Turf Taint
Yes. I refinanced last year 30 year @ 2.25%. With interest rates/inflation where they are, makes no sense to pay this off early. I'm on track to retire within 10 years and plan to keep this mortgage for as long as I have the house.
I will include the mortgage as part of the minimum yearly income that I'm planning for. Lets say in retirement the minimum amount of yearly income I want (including the mortgage) is 75k. In 10 years, if my portfolio gets to my number this will be less than a 3% withdrawal. A sub 3% withdrawal rate should last forever. I'm not even factoring in social security.
Ideally I'll be withdrawing 4% or more based on how the portfolio is doing. My plan is to be flexible in my yearly spending based on portfolio performance. In bad years, I'll just withdraw the minimum floor of income to cover basic expenses.
What I'm considering doing now is start buying $75k in 10 year TIPS for the next few years. That way I'll have that minimum income (inflation adjusted) available when I retire w/o having to sell any equities if they are down.
What's stopping me from doing this is that the bulk of my portfolio is in a 401k and can't buy individual TIPS. I'm considering changing jobs just so I'll be able to rollover my 401k to a Fidelity ira to do this.
I will include the mortgage as part of the minimum yearly income that I'm planning for. Lets say in retirement the minimum amount of yearly income I want (including the mortgage) is 75k. In 10 years, if my portfolio gets to my number this will be less than a 3% withdrawal. A sub 3% withdrawal rate should last forever. I'm not even factoring in social security.
Ideally I'll be withdrawing 4% or more based on how the portfolio is doing. My plan is to be flexible in my yearly spending based on portfolio performance. In bad years, I'll just withdraw the minimum floor of income to cover basic expenses.
What I'm considering doing now is start buying $75k in 10 year TIPS for the next few years. That way I'll have that minimum income (inflation adjusted) available when I retire w/o having to sell any equities if they are down.
What's stopping me from doing this is that the bulk of my portfolio is in a 401k and can't buy individual TIPS. I'm considering changing jobs just so I'll be able to rollover my 401k to a Fidelity ira to do this.
Posted on 11/12/22 at 7:02 am to Turf Taint
Plan to have my current house paid off before retirement, but do not plan to retire LA. Next few years wife & I plan on traveling around US to figure out where to retire and buy vacation home that will eventually become retirement house.
Hopeful I’ll be able to sell current house for more than what’s left on retirement house wherever I retire. Probably won’t take the payment and pay it off, but who knows what I’ll do in another 17-20 years
Hopeful I’ll be able to sell current house for more than what’s left on retirement house wherever I retire. Probably won’t take the payment and pay it off, but who knows what I’ll do in another 17-20 years
Posted on 11/12/22 at 8:47 am to Turf Taint
Maybe for part of retirement. Wife and I both work, enjoy what we do and make good money. I think we would both be bored if we retired soon.
Posted on 11/12/22 at 8:58 am to Turf Taint
My aim is to have enough assets to eliminate the mortgage balance if necessary, but will first research reverse mortgage because none of our children will want the house because they have their own houses. They would sell it for the proceeds.
Will still have to pay tax, insurance, and maintenance expense even if no mortgage, so cheap money now is cheaper money in the future.
Will still have to pay tax, insurance, and maintenance expense even if no mortgage, so cheap money now is cheaper money in the future.
Posted on 11/12/22 at 9:35 am to Turf Taint
This post was edited on 8/16/23 at 12:39 pm
Posted on 11/12/22 at 10:02 am to Turf Taint
House will be paid off when I hit 60…own a rental free and clear. Minimizing overhead in retirement is a must unless you have FU money.
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