Hate to delurk just to (re)start the The Great "Pay Off Or Not" Debate, but hey its a new year ...
IMHO you don't need firecalc to figure this out (emotional component aside). Just look at your SWR with debt load and a larger portfolio, vs. without debt load and a smaller portfolio. Since survivability of a portfolio is predominately a function SWR, your answer should be clear. Sure you could use firecalc and use a different AA in both scenarios, but fundamentally it seems logical to me that a lower SWR is always the better choice.
Here is my situation: looking at ER within the next year (aged 50). Portfolio is reasonably sized and we need SWR of 3% to maintain lifestyle w/ mortgage. 2.6% w/o mortgage.
So, I'm considering paying off... but...
Has anyone looked at using some kind of fixed payment annuity (my mortgage is fixed-rate) to fund a mortgage? Would that be more cost effective? I don't even know if such a product exists, but ideally I'd like is an annuity which would be just enough to service the debt. The term of the annuity would be 27yrs (amount left on mortgage). It would survive at full payment level until both me and DW are dead. If we both die during the period of the annuity the annuity would stop. Basically the insurance company would make a profit if we died before the term. Assuming the cost of this annuity is smaller than the mortgage payoff, it seems like this might be something to consider and give us a few more $$ to play with while we're alive to enjoy it... Might be a totally wacko idea, but anyone explored this? Could it work?
dizzy
IMHO you don't need firecalc to figure this out (emotional component aside). Just look at your SWR with debt load and a larger portfolio, vs. without debt load and a smaller portfolio. Since survivability of a portfolio is predominately a function SWR, your answer should be clear. Sure you could use firecalc and use a different AA in both scenarios, but fundamentally it seems logical to me that a lower SWR is always the better choice.
Here is my situation: looking at ER within the next year (aged 50). Portfolio is reasonably sized and we need SWR of 3% to maintain lifestyle w/ mortgage. 2.6% w/o mortgage.
So, I'm considering paying off... but...
Has anyone looked at using some kind of fixed payment annuity (my mortgage is fixed-rate) to fund a mortgage? Would that be more cost effective? I don't even know if such a product exists, but ideally I'd like is an annuity which would be just enough to service the debt. The term of the annuity would be 27yrs (amount left on mortgage). It would survive at full payment level until both me and DW are dead. If we both die during the period of the annuity the annuity would stop. Basically the insurance company would make a profit if we died before the term. Assuming the cost of this annuity is smaller than the mortgage payoff, it seems like this might be something to consider and give us a few more $$ to play with while we're alive to enjoy it... Might be a totally wacko idea, but anyone explored this? Could it work?
dizzy