Quote:
Originally Posted by logdog
I've been following TV for some time now and I know there are some very smart people out there, including some financial planners. We made our Lifestyle Preview a couple of months ago and immediately put our house on the market. Unfortunately, we're resigned to probably having to wait till next year for the market to start moving again. My question is, in today's economy, is it better to liquidate my mutual funds (which have lost a lot of value in the past year) and pay cash for a house or take out a mortgage and use monthly withdrawals from the funds to pay the mortgage? I have a decent government pension and military health benefits to cover day to day expenses. In the past, my goal was building wealth for retirement. But now that I am retired, is better to pay off a house and not have to worry about the stock market? Our economy seems much more unsettled these days than any time since 9/11. I would appreciate your thoughts.
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When we purchased, the housing market was not in the free fall that it is today. The asking price for the same house we purchased is approx. $40,000 less than what we paid. That said, we decided to purchase outright and paid off the bond as well. So our only expenses are utilities, taxes, insurance, etc. We now can easily live on our retirement income.
This was our personal choice and the recommendation from our financial planner based on our financial position at the time. If I had a mortgage, I would have to draw from the nest-egg to meet monthly living expenses. My sense of security would have been diminished.
So the easy answer is what ever market corrections you are able to tolerate and still be able to make mortgage payments and live comfortably in TV without financial worry is the position you should take.