should we pay off house

3oaks wrote:

should we pay off house

YES!

I would not have even thought about retiring with a mortgage still on my house. Being debt free before retiring was always engrained into me. I am happily retired with no financial burden. :)

Of course times have changed, but my thinking hasn't. To each, their own.

X-2, not having that payment every month, is money in my pocket, or in my fuel tank to keep on down the road.

heck I just hope to be able to pat myself on the back in 2017.
never thought I would be asking questions like this. age 65 just didn't seem real. I know people say it is not enough, but after paying off, we still will have about 375,000 we could tap into.

steptmother past, found out she gave the Ranch and everthing 1.1 million to HER grandkids

It really depends on too many variables. From a personal point of view I would do the following.
If you have a huge amount of liquid funds doing nothing, pay it off. If paying the mortgage off would deplete your saving, leaving nothing for future emergencies or opportunities that might arise, don't.
In the middle or in the position that paying it off leaves you short of liquidity, split the difference and refinance. Currently, 15 year fixed rates are under 3%. Rates today are near historic lows. While history does not drive the future, it is usually a pretty good predictor. Personally, I believe you would wake up in 2021 and pat yourself on the back for having locked in a loan at 2.9%.

YES YES and YES! Only the banking industry wants you to keep loans, that's how they make their money! We paid ours off 5 years ago, a mortgage does not put money in your pocket. That's the black and white answer to your question.
Brian

Assuming you are legitimately in a position to retire, yes, the house should be paid off.

Assuming you will make enough in the market to cover the payments is risky. Long term probably true but 2-3 down years and it can really eat into your nest egg and the smaller nest egg won't grow back as much the market does bounce back. Mortgage payments come whether the market is up or down. For your typical retiree (ie: you actually are retired, sold the business and don't have a lot of other deductions), the mortgage deduction is a joke. Once you account for the standard deduction, you need a huge mortgage to get anything off your taxes. Even if you do have enough deductions, you are paying the bank $10k to get $3k off your taxes.

Be very careful with financial advisors. Most have at least a marginal affiliation with something they sell (or get a kickback from a related business they recommend). Constantly assume anything they tell you is in their best interest and much of the training they have received has been molded by the investment industry, so even if they are dead on honest, they may not realize that they are giving you poor advice. This isn't to say you shouldn't consult one but don't blindly follow their advice.

toedtoes wrote:

NYCgrrl wrote:
Too many variables not mentioned.
My suggestion?
Hire an accredited independent financial planner preferably one who is a CPA specializing in retirement.

YES!!!

No offense to anyone on this forum, but do you really want to base your financial decisions for your future on what a bunch of complete strangers say on the internet???

You need to discuss this decision with a person who has the provable skills and knowledge to help you make the right choice for you. Talk to people you know and trust and ask for recommendations on a financial planner, meet that planner and ask lots of questions about his/her background and practice. Answer that planner's questions and provide information as to what you want to see for your future. Then make a decision based on the data provided to you by that planner according to YOUR needs, wants, and fears.

The key is to find a "financial planner" who is NOT trying to sell you, or get you to invest in, an investment package. This is harder to do than it may sound. If the financial planner is offering a "free review" of your finances, that means they are selling something. Most people, though, are not willing to pay hundreds of dollars to meet with someone for financial advice.

Friends just recently invited us to go along to a free "planning dinner" that was hosted by an investment group. Good dinner, actually! According to them, stocks are bad, so sell everything. What should you do? Arrange for a meeting with their advisors. They wouldn't actually say WHAT they were advising you to invest in, you had to meet with them privately at a later date.

We just got another invitation to a similar "planning dinner". We might go with friends just to see, but I know it will be the same. Free meal, and a really good restaurant!

toedtoes wrote:

NYCgrrl wrote:
Too many variables not mentioned.
My suggestion?
Hire an accredited independent financial planner preferably one who is a CPA specializing in retirement.

YES!!!

No offense to anyone on this forum, but do you really want to base your financial decisions for your future on what a bunch of complete strangers say on the internet???

You need to discuss this decision with a person who has the provable skills and knowledge to help you make the right choice for you. Talk to people you know and trust and ask for recommendations on a financial planner, meet that planner and ask lots of questions about his/her background and practice. Answer that planner's questions and provide information as to what you want to see for your future. Then make a decision based on the data provided to you by that planner according to YOUR needs, wants, and fears.

Agree I would ask my broker for this advise but If he/she had lost me 21% I probably be asking somewhere else too - Since 12/31/14 I am up about 2%

Just remember that your tax position can change as when you start taking required distributions (age 70 1/2) on an IRA this increases you tax liability -

Yes I am a retired CPA

An experienced real estate friend of mine said of houses and debt "either mortgage it to the max, or own nothing that way you either have no skin in the game and if the economy crashes so what and if you pay it off, no matter what happens good or bad, house worth more or less, it is still yours if it is paid off. Where you get hurt is in the middle" No matter what we might or might not make in some other account we are paying ours off soon and it will be ours.

NYCgrrl wrote:
Too many variables not mentioned.
My suggestion?
Hire an accredited independent financial planner preferably one who is a CPA specializing in retirement.

YES!!!

No offense to anyone on this forum, but do you really want to base your financial decisions for your future on what a bunch of complete strangers say on the internet???

You need to discuss this decision with a person who has the provable skills and knowledge to help you make the right choice for you. Talk to people you know and trust and ask for recommendations on a financial planner, meet that planner and ask lots of questions about his/her background and practice. Answer that planner's questions and provide information as to what you want to see for your future. Then make a decision based on the data provided to you by that planner according to YOUR needs, wants, and fears.

We paid off our house in 2005.The housing market had dropped like a rock when we decided to go full time in 2006. No profit in selling, so we rented it out.
It is still rented out and has completely repaid us for what we had invested in it. We have left our cash investments with the V500 and have done fine over the past 10 years.
Over-all, we are ahead by renting out the paid off house, and the value of the place keeps going up from that 2006 value. In a way it's like having the cake and eating it too.