[roob1]

Assuming you have current and continued solid financial solvency, and could own your residence outright with no financial impact on your lifestyle:

Given low mortgage rates 2.5%-3.5%, how would you feel about holding a mortgage on your residence in your retirement years?

[Brwne]

Originally Posted by roob1

Assuming you have current and continued solid financial solvency, and could own your residence outright with no financial impact on your lifestyle:

Given low mortgage rates 2.5%-3.5%, how would you feel about holding a mortgage on your residence in your retirement years?

We decided to carry a mortgage at these low rates because investment returns are generally higher. The caveat - the cash you would have used to pay off the mortgage (and the Bond?) must be invested and not spent.

[dewilson58]

Originally Posted by roob1

Assuming you have current and continued solid financial solvency, and could own your residence outright with no financial impact on your lifestyle:Given low mortgage rates 2.5%-3.5%, how would you feel about holding a mortgage on your residence in your retirement years?

The question is: How would you feel??

[Malsua]

Originally Posted by roob1

Assuming you have current and continued solid financial solvency, and could own your residence outright with no financial impact on your lifestyle:

Given low mortgage rates 2.5%-3.5%, how would you feel about holding a mortgage on your residence in your retirement years?

I'm a big fan of having no debt, but you can easily make 4+% in the market with relatively safe investments. There are no guarantees and the bottom could drop out. As long as you can live long enough for it to recover, it seems like a better route to maintain or build wealth. You do need to pay attention though. Dumping a big chunk into an equity fund or a money market fund and forgetting about it is not a good choice either.

That said, if you can afford a mortgage with your SS/pensions/etc. maybe just get the lowest possible payment and spend the rest? If you're not planning on bequeathing your assets, spend it. The house will still build wealth that someone will get when you check out.

I guess the bottom line is how risk averse you are and how liquid you are. If you have 500k in a checking account and are paying a mortgage, you're losing value due to inflation, do one or the other. Pay off the mortgage or open a vanguard account and start buying to your risk tolerance.

[davem4616]

We paid off the mortgage (but not the bond) because it's a nice feeling. After the 2008 crash we became very savvy about where we put our money...keeping all our savings in the stock market hoping to get rich is akin to putting it on a table in Las Vegas. We still have some money in the market as a hedge on inflation, but the overwhelming majority is in other vehicles and investments. For us, it's about enjoying our wealth and sharing our wealth...we are well past the era of accumulating wealth.

[CoachKandSportsguy]

Originally Posted by davem4616

keeping all our savings in the stock market hoping to get rich is akin to putting it on a table in Las Vegas. We still have some money in the market as a hedge on inflation, but the overwhelming majority is in other vehicles and investments. For us, it's about enjoying our wealth and sharing our wealth...we are well past the era of accumulating wealth.

Smart! actually, I like the phrase "we are well past the era of accumulating wealth". Yes, in retirement its about preserving wealth. . . Now sure about paying off the mortgage but not the bond, since both are expenses with rented money. I don't want any debt for retirement, as my income is limited with zero time to recover. . .

So if you can afford your lifestyle using investment money to bridge yourself to max Social Security, then using up 100% of your social security, and not spend your savings/investments, except for an ocassional big trip, you should be ok. A working couple with max social for both is at least $70K a year. . . which should be enough without dipping into remaining savings for awhile. . .

interest is always an added expense. . . you can't get around it. . . and the assumption that you can always make more in the market may not hold true during your holding period. . . maybe in the past, but that isn't your holding period

[petsetc]

We are in our 70's and just refinanced at 2.75% for 30 years. Statistically the market will far out preform 2.75% AND I suspect I will not live 'til pay-off. From a purely logical view, it makes no sense to me to not reap the benefit of OPM (other people's money). On the other-hand, my wife thinks debt-free is better. So far, I've won this battle. It's about your individual comfort zone.

As for the bond, even though the interest rate is higher, I believe that a paid-off bond is not recoverable in resale.

JMHO

[dewilson58]

Originally Posted by CoachKandSportsguy

So if you can afford your lifestyle using investment money to bridge yourself to max Social Security, then using up 100% of your social security, and not spend your savings/investments, except for an ocassional big trip, you should be ok.

Not wise for a majority of people............unfortunately a majority of people who follow this misnomer die prior to the benefit. Waiting for SS max is supported by old financial advice.

[villagetinker]

To the OP original question, we have no problem with a mortgage in retirement, and actually planned for it for many of the reason cited above. We did however pay off the bond due to the much higher interest rate. So i guess to answer your question, we have no concerns having a monthly mortgage payment in retirement.

[CoachKandSportsguy]

Originally Posted by dewilson58

Not wise for a majority of people............unfortunately a majority of people who follow this misnomer die prior to the benefit. Waiting for SS max is supported by old financial advice.

its now common advice from CFPs for people who have large 401K savings from many years of employment. And the years of investments since 401Ks have evolved have been very good ones. . . and people working part time after 65 learned from their depression era parents. . . don't always need to take it right away.

max social security start is now 69 i believe, and you are thinking that majority of people will die between 65 and 69? The median age of death is approximately 78. If you believe that you will die prior to 70, I agree, but if you only have 4 more years to live assuming you are in good shape from outside living in the villages, you've got bigger issues than money. But waiting gives you a higher income during your largest decade of active traveling. . . (phrased analytically to support my thesis)

so I am not sure I understand how you get to your generalized answer. . .

[charlieo1126@gmail.com]

I have only put down 20% on all the homes and condos (14) I have owned I have better things to do with my money,I’m 82 and in 3 rd year of new mortgage and quite comfortable with the rate

[Stu from NYC]

Could we get ahead by having a mortgage on our home probably yes.

However it is nice having no debt except for the bond.

When we are here longer and if we decide this is our house for years to come the bond will go away.

Real estate people have told us that most of the time you will not recover the bond if you pay it off early.

[manaboutown]

I started taking my SS when I hit full retirement age, in my case 65 and 10 months, which I do not regret doing. A financially very conservative friend of mine waited until age 70. As I do not need the income I put it into the stock market. My thought was and still is that if congress needs the money they will reduce or eliminate SS payments or tax away SS to recipients having over a certain level of income. Given the pandemic IMHO this could happen sooner rather than later...

People are risk averse in different ways. I still have a fixed rate mortgage on my house but it is in lieu of a mortgage I would need on a rental property which would of course come at a higher interest rate.

[rjn5656]

We just sold a house in the villages with no mortgage. We bought a new house with a 2.7 mortgage. Using the money in relatively safe investments. Can pay off at any time.

[dewilson58]

Originally Posted by CoachKandSportsguy

its now common advice from CFPs for people who have large 401K savings from many years of employment. And the years of investments since 401Ks have evolved have been very good ones. . . and people working part time after 65 learned from their depression era parents. . . don't always need to take it right away.

max social security start is now 69 i believe, and you are thinking that majority of people will die between 65 and 69? The median age of death is approximately 78. If you believe that you will die prior to 70, I agree, but if you only have 4 more years to live assuming you are in good shape from outside living in the villages, you've got bigger issues than money. But waiting gives you a higher income during your largest decade of active traveling. . . (phrased analytically to support my thesis)

so I am not sure I understand how you get to your generalized answer. . .

No, No, No silly boy, Trix are for kids.
Not assuming they die by 70.........even thou a lot do.


If you do a spreadsheet, (as an example) a couple can take in a couple hundred thousand dollars during the period from early SS to late SS. As a result, at 71 they have over $300k more in saving. Now........how long before the late SS catches up with the early SS and eliminates the $300k pot???? The answer: Well past most people's life expectancy.