[USER]

At the rate of $1400 per month, I figure we are about 13 months away. Our interest rate is 3.4 and otherwise we have no debt.

We are both retired (I’m 58 and have been retired for 4 years, he’s 59 and has been retired for 3) and we have pensions that equal (total) about 120K per year.

We also have approx 1M in retirement accounts. So I was thinking/dreaming of trying to pay off the house by the end of Dec. with the thought of making a clean tax break for next year. This would pretty much either double our monthly payment – or I could pay thru December and take 10K out of one of the retirement accounts toward the end of the year – I would get a 20% tax hit on the 10K, plus whatever the State would take, possibly another $500-$1000.

I know I am luckier than many, but we have worked very hard to get to where we are! I’m just anxious to get this damn thing paid off – I feel like we are so close and yet so far! Otherwise it would be paid in full by June 2024.

What would you do if you were in my boat?

[Bill]

By the numbers, there is absolutely no reason to pay the loan off faster. You can keep the money in a savings account and make more money than the interest.

Of course, if it’s going to bring you joy and make you sleep better to have it paid off, feel free to spend the extra money to do it.

You have plenty.

[Matthew]

Are you afraid of having this mortgage with 120k+ in annual income? No math shows you are at any risk of not affording the mortgage. There’s just a lot of negative emotion with having this mortgage… once it’s paid off, you will still need to allocate several thousand dollars every year for housing expenses.

[Lee]

We did that, paid off one year early. BUT, we did not compromise our investments in any way. It felt good. We’d saved some extra cash. On the end of the loan, it is all principle.

Don’t steal from anything that will cost you interest to pay for something which has about no interest.

[Jaimie]

Huh? In what world does it makes sense to pay a 20% penalty on a 3% loan that will be paid off in a year? Live your life with your husband.

Enjoy yourselves and let it go.

[Deb]

I understand the impatience, because we’re also nearing the end of our mortgage, but the hard part is over and it’s not a good idea to dismantle retirement savings to pay off the easy end of the amortization.

[Mike]

Don’t take a tax hit to pay off sometime, that will be gone in a year with normal payments, Chill, and enjoy your retirement.

[Paul]

June 2024 will come whether you pay it off in June or 6 months earlier. With the first one you’ll have a paid off house, and with the second one you’ll have a paid off house and less money.

[Author]

Posts