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re: Do you plan to have a mortgage on your primary home for part/all of your retirement?
Posted on 11/12/22 at 11:48 am to Grievous Angel
Posted on 11/12/22 at 11:48 am to Grievous Angel
quote:
No. I paid mine off when I was 35.
nice. paid mine off right around 5 years after you.
2
Posted on 11/12/22 at 12:04 pm to Fat Bastard
Maybe a small one. I plan to sell my large family home with tons of equity and a mortgage to then downsize into something else and pay mostly cash for it.
Posted on 11/12/22 at 12:36 pm to Fat Bastard
Taxes and insurance are 2/3 of our escrow. Whether I pay off the mortgage or not isn’t going to change much. I think Texas property taxes impacts the optics of “owning” the home. I have meaningful payments into perpetuity regardless.
This post was edited on 11/12/22 at 12:37 pm
Posted on 11/12/22 at 12:47 pm to lynxcat
2/3rds? That's hard to believe. It's not that high in Orange County, California.
Posted on 11/12/22 at 1:46 pm to AUCE05
Without pulling it up…It’s something like ~$23-25K annually for property taxes and insurance. Both are about the same cost annually. Total escrow is ~$2900/month. So yes, right around 2/3.
Posted on 11/12/22 at 3:23 pm to Im4datigers
quote:
Maybe a small one. I plan to sell my large family home with tons of equity and a mortgage to then downsize into something else and pay mostly cash for it.
We plan on moving when all of the kids are gone in a few years but won't be retired yet. This house is too big for the 2 of us. We do plan on buying our last house at that time.
We'll probably do a 10 yr mortgage on what's left after we dump the equity from this one into it which should put us paying it off before we retire.
Posted on 11/12/22 at 4:07 pm to Turf Taint
I have a mortgage during retirement and the rate is 2.75% for 12.5 more years. I can pay it off tomorrow but I am making 4% min in US T bills so I will continue to pay the mortgage until rates fall below the 2.75% level or I feel comfy buying equities.
ETA- Even though I’m “retired”, I have a couple of income streams that will be around until I pass, so not the normal retirement situation as most people.
ETA- Even though I’m “retired”, I have a couple of income streams that will be around until I pass, so not the normal retirement situation as most people.
This post was edited on 11/12/22 at 4:16 pm
Posted on 11/12/22 at 5:42 pm to Turf Taint
Paid off my home at age 44. Plan to sell and significantly downsize shortly before retiring. Put whatever gains we get into some sort of dividend paying security and use it to cover insurance/property taxes. With a bit of luck our SS, IRA’s and other investments will carry us the rest of the way. I would prefer not having a mortgage at retirement.
Posted on 11/12/22 at 8:15 pm to Turf Taint
If my interest rate is a point less than my savings account rate, yes.
Posted on 11/12/22 at 8:50 pm to turkish
As others have said, it can make sense if you are making more than your mortgage rate, but I personally plan to pay mine off before I retire. In part for the psychological benefit. I just want that security.
Posted on 11/13/22 at 1:14 am to SquatchDawg
quote:
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.
Who downvotes this? If you have a counter argument then state it.
Posted on 11/13/22 at 8:32 am to Turf Taint
No. Refinanced to a 15yr two years ago. It’ll be paid off right before expected retirement.
Posted on 11/13/22 at 9:05 am to Grievous Angel
quote:
Close, 250k in 2002. Worth about 500k now.
$250k in 2002 = $414k today
Posted on 11/13/22 at 9:07 am to GumBro Jackson
quote:
psychological benefit. I just want that security.
This was important for me. More so, gives the urge not to even look at other houses. Like when a car is paid off...you're not itching to get another car payment. If you got long enough without one, you don't want one.
So more so controls me wanting to buy/look.
After having rentals it makes me want more of those.
Posted on 11/13/22 at 10:00 am to Billy Blanks
I was lining everything up to pay off right at retirement but I’m at 2.75 interest rate so I really see no sense in paying it. It’s the best hedge to inflation and I’m spreading my wealth across a few other avenues. While no mortgage sounds great, I have several avenues of cash flow along with a pension at retirement, so I’m good not worrying about a low interest rate mortgage. Autopay and don’t even think about it.
Posted on 11/13/22 at 12:08 pm to DiamondDog
quote:
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.
Let's say I have 5M in investments with an annual spend of 125k, and I'm carrying a 100k mortgage at 3%. How is that "living life dangerously?"
This post was edited on 11/13/22 at 12:10 pm
Posted on 11/13/22 at 1:02 pm to MrJimBeam
quote:
I was lining everything up to pay off right at retirement but I’m at 2.75 interest rate so I really see no sense in paying it. It’s the best hedge to inflation and I’m spreading my wealth across a few other avenues. While no mortgage sounds great, I have several avenues of cash flow along with a pension at retirement, so I’m good not worrying about a low interest rate mortgage. Autopay and don’t even think about it.
I'm not knocking that one bit. To give context, my income is highly volatile and not as stable as most.
Also, having less debt has allowed me to leverage the equity into anywhere from 3-6 houses at a time for investment/flip/renttal purposes.
I didn't pay it off purely just to have it paid off. Some was to protect me from myself.
This post was edited on 11/13/22 at 1:13 pm
Posted on 11/13/22 at 6:33 pm to Turf Taint
Whether your mortgage is paid off or not, remember to calculate how much of that monthly payment is property taxes (that you will still HAVE to pay), and homeowner's insurance (that you will probably WANT to pay).
In reality, we're still just renting our personal property from our local governments.
In reality, we're still just renting our personal property from our local governments.
Posted on 11/13/22 at 6:54 pm to FinleyStreet
quote:
Let's say I have 5M in investments with an annual spend of 125k, and I'm carrying a 100k mortgage at 3%. How is that "living life dangerously?"
That's an absurd scenario. The average person with a mortgage at 65 doesn't have 5M worth of assets.
Posted on 11/13/22 at 7:30 pm to Turf Taint
quote:
If Y, please share your thinking.
I got the money so cheap.
quote:
In particular, interested in how you plan to de-risk your finances covering essential expenses, including the mortgage?
I'm going to have enough liquid assets to retire the mortgage at any time that I choose in retirement. As long as it outperforms the ridiculously low interest I'm paying, it is literally money in the bank.
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