Personal opinion: Unless circumstances forced me, I would never hold debt of any kind in retirement and that includes mortgages, car loans, credit cards, or anything else.

Did exactly the same thing. Now my wife gets considerably more SS than me, which is great because statistically I will be gone first and she will be better protected.

But, by taking SS earlier than “Full recovery” I took the “extra” cash and invested realizing an annualized return of over 8%. This more than compensates for the lower dollars I receive from SS. I factored in family history in terms of longevity. I will always be ahead of my break even point at this stage of my life. I’m 70.

[for TOTV lawyers] For an actual decision, a person needs a comprehensive personalized model or analysis of all income sources, all assets, all liabilities, and expected expenses, and the behavioral answer to the question: "What monthly level of income are you satisfied with that you are not willing to wait any longer which you can live on and keep your lifestyle" which is based upon the after tax income for spending. [/for TOTV lawyers]

For the TOTV debaters for the TOTVs stuck inside due to the cold: All depends upon your age, your starting point in the SS benefits table, your income and your assumptions, whatever you think your future will be.

The previous answer i posted, does not include any personalized assumptions such as:
working for or living on income from other sources for
an assumed investment rate of return to be invested of benefits,
Medicare deductions
a tax rate of the other income,
a combined tax rate with other income
a deductible mortgage
a bond with interest
lottery wins
real estate tax rates
lot size and view
Garage Sq footage, with out without golf cart garage
tonnage of air conditioner
nor the average temperature of the inground pool.

YMMV depending on which vehicle you pick for after tax spending, and I picked blue!

Fortran & IBM cards.................oh yes. :icon_wink:

We did the same for the same reason.

Wow 17 grand in fees. Lennie the loan shark would give a better deal.

Why did your wife have to start at 65 and then stop? She is entitled to 50% of your SS regardless, so she could just wait until 70 and file.

Trying to understand what I'm missing here.

I don’t like having a mortgage ..... especially in this economic downturn, so I paid off my mortgage this month. This way, if my wife’s pension (from a state up north) goes bad, at least we will have a place that the bank can’t foreclose on. Same for my annuities .... if they go bad, we still will be ok.
Better safe than sorry.

Fortunately the 029 punch machines have been gone for a bit (40 years). However, I do miss the 029 punch cards because they are good for taking notes and they fit perfectly in a button down shirt pocket. Fortran has morphed into a modern language with support for recursion, dynamic memory allocation, pointers, data structures, interface blocks, modules, and more. It is still doing the heavy lifting for most things scientific.

This attitude is one which protects against economic unknowns.
 

This attitude is one of retirement is for the protection of wealth, not the maximization of wealth, is very healthy. The probability for state pension bankruptcies and other bankruptcies is not zero, and not a fixed probability. That's why there are re-insurance companies, to insure insurance companies. That is also the basis of the behavioral bias "recency bias"

Most if not all accidents or mistakes come from the assumption that all possible outcomes are assumed to be taken into account. Then after the accident the harmed usually says something to the effect that "I didn't see that coming". Same can be said for personal financial outcomes. Free and clear eliminates any risk of being called away for reasons beyond your control, or loss of assets/income backing the payment.
Ask pete carroll with the play which lost the superbowl to the patriots. Not one play has a probability of 100% guaranteed outcome, not even a kneel down.

Our 25 year mortgage, taken in 2014, will be paid off this year (2021), after 6-7 years, for this reason.

So Joe picked blue as well. . .

If she did not file she would not get anything from SS.

By filing and than stopping she gets 50% of her husband's SS until she goes ahead and completes application. By waiting till 70 she maxes out her SS.

You mean this Fortran, published by MIT?
 

https://www.talkofthevillages.com/fo...rs-fortran-jpg

my wife's book, not mine. . . .

We plan on doing the same thing, for these reasons and one other. If I give in to the current requests for consulting piling up, the mortgage will help write-off the additional income. Primary residence interest rates remain at historic lows, so the difference between even what conservative investments can make (albeit, I've been leery of the inflated market on equities before the pandemic and only seeing it get worse, once the full ramifications are recognized by Wall Street) and the interest paid on a small mortgage, makes sense for us.

As much as people want to be analytical about money, the truth is that money evokes emotional responses. That's the key.

Do you feel happy with your financial decision of keeping a mortgage and investing that money instead in something that can earn more (after tax) than the mortgage costs - so you can leave more for your heirs? Great, go for it.

Do you feel happy with the security of having debts paid of and no need to try to find investments that have a risk of falling in value? Great, pay off your mortgage.

Trying to convince a person who loves investing and the market return potential that paying off a mortgage at such a low rate is the wrong thing to do is just as bad as trying to convince a fixed return asset preservationist that paying off debt is bad.

The good news is that most people are great at rationalization and will end up being happy with the choice they made.

Anyone over the age of 60 who developed software should find the following very funny:

Real Programmers Don't Use Pascal

The definition of behavioral finance.:bigbow: However, by exposing the hidden biases, with financial education, one can potentially see the benefit of different options on their lifestyle.

But not always. CFP had constantly recommended to my dad to gift money from this estate prior to his death for estate tax, usefullness and control reasons. My dad could not do it, did not see or understand the benefit, as he was a depression era engineer with physics approach. his response was largely a depression generational response and partly a personality type bias. Concepts and abstract future were incomprehensible to him. ie, I put up his mailbox without taking measurements, and he did not like that at all. . . measurements assured him of his process were correct.

So totally agree with Tom M, which is why when posting on an open global forum, one has to accept the debaters, the lawyers, and the common knowledge statements. Good read:
Amazon.com

///

I use what I call my 'sleep at night' test. I pretend I have done a financial thing and then see how I can sleep with that decision.

Whoa! The fees on a reverse mortgage would be even higher than $17K!

The ONLY things that would cause a refi to have $17,000 in closing costs would be if you were buying the rate down even lower than the "par rate" (the advertised rate) or if you had to have significant upfront mortgage insurance for being over 80% leveraged. There are no standard closing costs that would climb to $17k on a $300k loan. You are leaving out some key facts.

Yes, but but only getting a 20%-30% reduction in taxes for every interest dollar spent still reduces after tax income by the 80%-70% of interest paid, so the logic is a behavioral emotional response to paying taxes, not a rational plan after tax income maximization approach. A rational after tax maximization income approach is to eliminate all cash expenses, because there is only a tax rate % benefit of additional expenses. - Expense out + tax % savings = cash out of your pocketbook of more than 0 expenses. The only expenses to deduct for income maximization are those required to produce the income. optional mortgage interest is not required in your stated case.

There is never a free lunch for taxes. . and personally, I love paying more taxes because it means that I am wealthier, after all proper after tax income maximization approaches have been applied. . .

:boxing2:

sportsguy

Hmm, have I mentioned that there is no bond in lake county!

Is the 6% on the bond tax deductible?

Not tax deductible if it is your personal residence and not rental property.

Deductible until audit.

Like everything else.

Dep

With respect, you've forgotten or ignored the rest of my post. The deduction against potential income is simply an additional part of the equation, with the difference in actualized returns on investments outweighing the mortgage interest, being the primary reason. Pure math and logic, no "behavioral emotional response" involved

Do they still do that?

No, you can stop filing tax returns now.

Let me know how it works out.

If a large entity does not issue you a Form 1098 on interest paid to it the interest is likely not deductible on Schedule A as an itemized deduction. IRS computers match up 1098s and 1099s on interest earned with what is reported on tax returns to assure accuracy and compliance. Of course as previously posted bond interest is likely deductible on a home held for rental as an expense.

"Form 1098. The standard Form 1098 is the "Mortgage Interest Statement," which comes from the company that services your mortgage loan. Mortgage interest on first and second homes is generally deductible for taxpayers who itemize their deductions."

from Guide to 1098 Tax Forms - TurboTax Tax Tips & Videos

Noooooo . Getting money upfront, especially if you decide your going to die early is best

We actually have 2 mortgages, Florida and Mass. Someday in the next 13 years we will sell our Mass home and just stay in our trailer in NH but for now we have the mortgages which both have escrows to take care of the taxes etc.

I like being Debt Free

I believe that your post said "If I give in to the current requests for consulting piling up, the mortgage will help write-off the additional income." That statement is the one to which I was responding, and to which the common knowledge fails. My argument versus this statement still stands.

However, what you are stating now is that this statement isn't the primary reason, but an incorrect common knowledge argument to support your primary reasoning, which is that the current investment of the principal is greater than the interest rate of the mortgage, which is an income maximization position.

To that I have no disagreement:ho: to the statement that an interest payment offsets income is a behavioral bias as stated is still valid, its a tax minimization strategy inferior to an income maximization strategy.

Reverse mortgage or buy stock and rent it out using covered call options.

COBOL Girl here!
Reply to #53. CoachKandSportsguy

The older spouse can start social security and the other one can claim under them while letting theirs grow to maximum then collect under their own name. We did that. Our prior 30 year home was paid off but we close on a new build at TV in Feb and decided to carry a mortgage ..locked in at 2.75 with one chance to lower it. We will not plan to ever pay it off and do other things with our money instead.

I believe this is no longer allowed as of 2016.