Paying off the bond, is not a lot different than paying cash for a house here in TV...or getting a mortgage.
While it seems intuitively to be a no-brainer to pay cash and avoid the mortgage payment...that isn't necessarily the case.
Should You Pay Cash for a Home Instead of a Loan | Money
Quote:
How you pay for your home is a very personal decision and paying in all cash will likely work for some people but not for others. This generally makes sense if the home’s price does not subtract a significant portion of your liquid assets and/or the interest rate you would pay on a mortgage is higher than what you could earn on other investments. It’s important to properly assess your financial situation and long-term investment strategies, the drawbacks as well as the benefits.
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I personally chose a middle ground.
When I bought here in 2011, I decided that a small mortgage was by far the better choice for me.
I still do consulting work at times and therefore the mortgage deduction...really helps in my tax bracket.
In addition, the interest rates were historically low and the extra amount in the bank with investments paying much more than the loan %...made the choice easier.
I have a neighbor that liked to brag about paying cash for their home (about 10 years ago), but one spouse went back to work a few years ago, because they became concerned that their
'nest egg' (small pension/SS/savings)...was being depleted faster than anticipated.
Some of us have nice, solid pensions and don't depend on SS...but others have retired based on their acquired savings and SS.
I golf with a guy that was whining recently about the addition of an expensive drug he just started taking and the price of his co-pays being significant. Since I knew from his ridiculing others for not paying off their bonds in previous conversations, whereas he had, I asked him if he knew then what he knows now...would he still pay the bond?
His answer was...
"probably not."
It really is a personal choice and I'm not going to criticize someone...for whichever way they decided to go.
