Like so much else, it depends. What is the mortgage rate? What are the terms? What are present interest rates? What are other investment alternatives? What is your personal comfort with having debt? It depends. And the answers often are different for different people.
When the tax laws changed in 2017, we determined the standard deduction was best for our situation (SALT cap at $10K), so we paid off the mortgage balance. I discussed it with a couple of older coworkers and they had done the same. We would have paid it off before retiring anyway (to have zero debt in retirement).
Great point. The TCJA made it easier for me to make the decision to payoff the mortgage early. I wanted to anyway, just to be out of debt, but not getting the deduction put me over the top.
I looked and I hadn’t answered this. We prepaid our mortgage since we were within 5 years of retirement and wanted to be debt free. Our daughter and son in law were in their 20s and did not prepay their mortgage, they put more in their retirement, then when the rates got really low during Covid, they refinanced to a 15 year. I think we both did what made sense for the times we were in our lives. Chris
Like so much else, it depends.
What is the mortgage rate? What are the terms? What are present interest rates? What are other investment alternatives? What is your personal comfort with having debt?
It depends. And the answers often are different for different people.
When the tax laws changed in 2017, we determined the standard deduction was best for our situation (SALT cap at $10K), so we paid off the mortgage balance. I discussed it with a couple of older coworkers and they had done the same. We would have paid it off before retiring anyway (to have zero debt in retirement).
Great point. The TCJA made it easier for me to make the decision to payoff the mortgage early. I wanted to anyway, just to be out of debt, but not getting the deduction put me over the top.
We accelerated paying off our mortgage in 2009 and paid it off in 2012 for the following reasons:
We considered the mortgage as part of our bond portfolio (a negative bond) and interest rates were lower than our mortgage rates.
We were maxed out on 401(k) contributions
We wanted to be mortgage free to reduce our ongoing living expenses in order to maintain our goal being able to comfortably live off of one salary.
I looked and I hadn’t answered this. We prepaid our mortgage since we were within 5 years of retirement and wanted to be debt free. Our daughter and son in law were in their 20s and did not prepay their mortgage, they put more in their retirement, then when the rates got really low during Covid, they refinanced to a 15 year. I think we both did what made sense for the times we were in our lives. Chris