Why is the answer "always retirement"?
Do you have some type of crystal ball that the rest of us don't have?
Mortgage/Retirement question
- Thread starter pfgemployee
- Start date
Why is the answer "always retirement"?
Do you have some type of crystal ball that the rest of us don't have?
If this thing is right...and if I plug in the 12% they plug in...in 30 years, there's going to be some structure on campus named after me.
Yep. Hey, if it happens, great, since I've got a nice chunk in index funds. But I'm not going to hold my breath for 12%.
Would be similar to this retirement plan...
I read it on the internet so of course it's true... but honestly my personal preference would be to keep the funds flowing into your 401k/roth. Especially with OP's ridiculously low interest rate on their mortgage. I'd maybe pay it off sooner if you had some sort of wild interest rate from the 80's that was between 8-15% ( source: my parents interest rate on their home bought in 1986 was 15%)
We could be headed into choppy economic waters soon, but I wouldn't say it'll be unprecedented.
The question has a math component. Investing and finance always does. So we can't put away our calculators and go on straight emotion.
The mortgage interest rate of the poster is really good. It's cheap money. OP can figure the risk-reward for their scenario and go from there.
As always investing and finance isn't a one size fits all. I understand the want to be mortgage free. But is that economically the best move in the long term? Maybe yes. Maybe no.
Thank you. I'm of the belief that "choppy waters" is a naive characterization on what could happen when major cities and states start realizing they are insolvent and how that affects things at the Federal level and ultimately the markets.
What historical time period are you relying to point to and say, oh...we've seen this before.
That would be my "personal preference" as well to invest as much as possible.
My personal preference however, doesn't affect unrepresented looming financial realities at almost all levels of government.
I'm not saying you're wrong and I'm not taking a very optimistic view of the economy in the next 18-24 months, but I'm not in financial Armageddon territory just yet.
I'm keeping money out of the market.
1. As a buffer against the nasty downturn
2. To "keep my powder dry" if investing opportunities jump up in the downturn
Best plan for everyone? Nah, I could be spending money on Bitcoin, gold, guns, and a survival bunker
Again...no one that makes money in the financial services industry is going to be promoting paying off your house.
This strategy make money for no one .
Banks lose out on interest payments
Investment firms lose out on potential new investment money
Financial "advisors" don't make commissions or earn a fee if you money is going to pay off your house, vs being invested with/through them.
Be wise. The headwinds and the noise from the loudest "experts" will downplay paying off your mortgage.
This strategy make money for no one .
Banks lose out on interest payments
Investment firms lose out on potential new investment money
Financial "advisors" don't make commissions or earn a fee if you money is going to pay off your house, vs being invested with/through them.
Be wise. The headwinds and the noise from the loudest "experts" will downplay paying off your mortgage.
The OP has made the mortgage for 21 years...he’s been through two huge ups and downs. Someone’s “personal preference” is never the right answer for someone else. I can say that with certainty.
Agreed 100% historically speaking.
That doesn't help if we are entering a time of unrepresented challenges.
Which is basically what I was saying.
My personal preferences won't override unprecedented fiscal challenges.
I mean i guess you either believe in the American economy enough to think that we will ride out the storm or else whether you pay off your mortgage or put money into retirement won't matter haha.
I'd say the last 100 years of the markets have a long history of people claiming we are in unprecedented times. It has been wrong to listen to them almost every time. Sure, you might get lucky and call the top of the market but history is filled with many more people who bet against future gains in the market and lost.
That doesn't mean it isn't a good time to be rebalancing out of stocks into bonds or paying some extra on your market, but the worst you can do is constantly sitting on the sidelines while you're working expecting a crash. That big crash may not come until you're older and least prepared to withstand it.
I had always believed that banks loved borrowers paying off mortgages in a rising interest rate environment. In this case the OP would be giving the banks accelerated principal return which was tied up in a low rate which they can turn around and lend at a higher rate for better return.
I want to emphasize, I don’t think I’m smarter than anyone else. I’m just observing the current and future realties of obligations that major cities, states, and the federal gov’t have gotten themselves into and realize, we’ve never seen this before. Given that, why would I assume past history is a solid indicator of the future?
A lot of people keep using the line, “well...historically…” to validate their point. I’d just push back and ask – what are your relying on to assume history is any decent indicator of future results when it comes to the tomorrow’s markets and also doing the mortgage vs investing decision? I’m suggesting, there isn’t anything solid to base that on. You are basically resorting to gambling. We are in unprecedented budget deficits and corresponding expense obligations.
If things go south….at levels and circumstances we’ve never seen in this country, then you are in a much more secure position for you and your family if you’ve wiped out your mortgage obligation.
A lot of people keep using the line, “well...historically…” to validate their point. I’d just push back and ask – what are your relying on to assume history is any decent indicator of future results when it comes to the tomorrow’s markets and also doing the mortgage vs investing decision? I’m suggesting, there isn’t anything solid to base that on. You are basically resorting to gambling. We are in unprecedented budget deficits and corresponding expense obligations.
If things go south….at levels and circumstances we’ve never seen in this country, then you are in a much more secure position for you and your family if you’ve wiped out your mortgage obligation.
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In addition to saving for retirement, you should look into long term care insurance. Medicare doesn't cover those costs and they can wipe out your nest egg in short order, making all those years of savings a lost cause. I emphasize to look into it now, regardless of your age. I didn't and now have a pre-existing condition such that I can't qualify for that coverage. I waited too long. I am in great financial shape, but the lack of long term care insurance is a big risk looming over my future. It's probably even more complicated and important if you are married with a family.
He’s not wiping out the mortgage. That’s not the scenario in the OP.
