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Mortgage Retirement Plan

June 10th, 2017 at 10:41 am

No way will my DH go along with paying down the mortgage early. It goes against all his brain power. It's an emotional thing and I get it. Paying down the mortgage isn't logical nor mathematically correct. But it feels good emotionally. It makes you mentally happier I think personally. But he's data driven so no way am I getting around him on this.

But being 38 and 39 and starting a 30 year mortgage is annoying. I don't care that it makes sense. I don't care that even after retiring it makes sense to draw from a portfolio and pay our mortgage. I like the idea of not owing anyone on our house when we retire. But marriage is a compromise.

So instead I'm going to track our progress to having enough money in our taxable accounts to pay our mortgage in full. Since every penny and bonus we don't spend we invest/save it's reasonable to assume I might be able to talk him through cashing out and paying the mortgage when we retire.

I also think at that point we'll be really FI. Right now we are can pay off 18.93% of our mortgage.

Do I have any goals? I'd like to have 10% of our mortgage a year saved. That is a very big stretch goal. We are on track with principal paydown to paydown about 2% a year in the beginning. Adding another 10% seems like a lot. That would put us at 10 years until we have enough to pay off our house. Life has a way of happening. Plus having enough to pay off our house isn't enough to retire on. That's just a start.

5 Responses to “Mortgage Retirement Plan”

  1. creditcardfree Says:

    He doesn't understand how much interest is paid on a 30 year vs paying off early? Isn't that data you could get behind?

    I do like your plan though! My goal is to pay cash for the next house we purchase.

  2. ceejay74 Says:

    I hear ya! I was 40 when we bought this place, and then we refi'ed to another 30-year when I was 41. No way am I going to keep this mortgage until I'm 71! It's not in the cards to pay extra on it right now, but in a couple of years that's going to be my focus.

  3. PatientSaver Says:

    Well, I don't know if everyone would agree it's "logical" not to pay it off. Many people would say it is. It really just lightens your load when you pay off a mortgage; you feel like you have more options in life without that particular encumbrance. No regrets here!

  4. LivingAlmostLarge Says:

    CCF The interest is less than we would make investing. quick returns on our investments over 12 years is so far between 6-9%. I would probably be a guess that over 30 years it won't get worse than 6% and probably better. With our tax bracket we are paying around 2.25% interest on our mortgage. And yep I get the total amount of interest paid. But for every dollar we don't pay it down can we beat 2.25%? I think we can.

    I like the idea of it going down. I have a feeling that we'll pay it off when we want to retire.

    For sure if you have a 401,457 or roth ira not maxed out you should be taking advantage of all retirement savings then putting extra on a mortgage. Take advantage Ceejay of your retirement opportunities. You can never go back. So even if the mortgage takes longer you should focus on the 401k and IRAs first. Then pay down the mortgage. The tax break you get from the 401k say 25% is worth more than the 2.25% alone.

    For us we are maximizing all tax saving vehicles and will probably put away a little more for the kids I'm thinking an extra $2k year for $4k total and then I'll really look at how much we have to throw at the mortgage.

  5. MonkeyMama Says:

    Sounds smart to me. Paying our mortgage any earlier doesn't amount to a hill of beans on the interest. Not at these interest rates.

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