Contrary to popular opinion, as I usually am, I'm not always a big fan of paying off a mortgage. Truly, it is one of the few tax deductions you have left once your kids have grown up and left the nest. When you reach your 70's you also have the additional income to declare from IRA distributions, and very little in the way of deductions.
Is it wise to tie up significant liquidity in a house that you have no access to until you either sell your home or take a home equity loan and PAY interest on your own money. How is that smart?
Why not have a manageable mortgage that fits your retirement income budget and enjoy your money living your life. If the money invested conservatively, you have access to it immediately if you need it and you can always choose to pay off the mortgage if it's really bugging you.
Also, it is important to consider that if either partner should need long term health care someday, the house could be included in the spend down to qualify for Medicaid if one spouse has already passed.
If you're not retired yet, what if you needed the extra liquidity to get you through a job loss or a major medical expense. Sure, it's nice not to have a mortgage payment to make, but that fact is not going to put food on the table or gas in the car. Making extra payments to get rid of your mortgage is like burying money in the backyard. It won't reduce the interest rate you are paying and the bank just gets to have more of your money now. I'd rather they have it later.
Don't go hogwild and saddle yourself with ridiculous mortgage payments - that's gotten a lot of people in trouble already as we well know. But a modest mortgage at today's interest rates, may be something to consider.
-Lady Fi
Kathy
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