Mortgage Paydown as Bond Allocation?

[sgeeeee]

. . .
I plan on retireing next May. *My loan is at 4 7/8% and I could pay off around 70% now, and the rest by my retirement date if I so choose. *I have 12 yrs left on my mortgage. *I look at paying it off as locking in 4 7/8% for this term. *

I would look at this as a fixed income portion of my asset allocation. *. . .

The 4 7/8% mortgage rate gives you some long term advantages to keeping your mortgage. But only 12 years remaining and your intent to only consider fixed allocations to offset the mortgage may offset any potential advantage.

Try running the FIRECALC simulations if you have any interest in what would have paid historically. You can use the options in FIRECALC to turn mortgage payments on and off at appropriate times and also include one time payments.

Of course the past may not be an indicator of the future. But then again, making decisions on mortgage rates that will apply for decades based on todays bond rates is a little like deciding your asset allocation based on what the stock market did today.

Good luck. Hope you make the right decision and retire wealthy early.