I agree it's best to be debt free in retirement. But there's never been a better time for real estate loans. Prices are depressed and rates may never be this low again. If you have pre-tax funds (IRA) that you can fence off for mortgage payments, you could essentially withdraw it tax-free if you can deduct the payment which will be mostly interest. Also, after age 70.5, it's a convenient way to meet your RMD.
If your loan out lives you, your heirs can decide if they want to keep the property. If you're planning a short-term ownership, say 10 years, you may actually make a nice profit when you sell if the economy turns around by then (let's hope). In either case, you don't make a big dent in your nest egg up front.
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