About to lose my job at 55, I think I can do it....

[kb50872]

How many more people would even own a home if not for a mortgage? the reality is, for most Americans walking into a realtor an plunking down 200K in cash is not an option. I won't even think about how long it would take my kids to try and save for a decent house where we live. So for the average Joe it's not about leaving your cash somewhere to make money. heck, I know plenty of folks who struggled to even get the 20% down needed for a conventional mortgage.

Now I also think having been raised in NYC, I never knew many people who lived in the eternal pursuit of owning a home, then I married a European who lovingly said all the time, "the world works to live while Americans live to work".

What I am finding is that for me is retirement is a "continuous" process, especially when one retires early so don't get discourage if next year you are still figuring out what retirement life would be. Even "retirement" comes with preconceived notions. lol, I use to hear how everyone would travel when they retire. Most of my friends and myself who have retired really don't travel any more than they did before retirement. at most 1 extra trip. When I got my "please go away" papers from mega corp, I looked forward to finally pursuing my passion/dream of owning my own bakery. then I did the investigation and found out exactly how much work I was going to be putting in and that "dream" and said, "Oh H%$%LL no", lol now I have a part time gig at a bakery. best of both worlds. I pretty much make my own schedule and enjoy the baking while letting some one else be the boss.


for me the ability to have "choices" is really the peace of mind. If I want to pay off my mortgage I can, if I decide to hang onto it for another year (I usually reevaluate every year) I can. I still have visions of owning a house on the beach down south some where so that will be another choice down the road (do I downsize and sell this one?? hang onto it and be a snowbird??) You really don't have to have it all figured out by the time you leave.

I struggled to get my first home, made a lot of sacrifices, then I moved into a bigger home, was not needed but got used to it, filled it with lots of 'stuff'......funny how life can be can driven by illusions, we get there and wonder.

I have very fond memories of my college days, no responsibilities, parents still alive, hope for the future. Did it pan out? Mostly. I recall an old study concluding those 55 are the happiest. I also remember how unhappy I was in my 30s and 40s, now that I am here, I can say that study is mostly true.

 

[Yarnstormer]

You may see a utility bump if you are home all day. However, I would think the reduced commuting and work expenses would offset that.
Practice living on the 2k til the day! I'm jealous sure wish I had access to reasonably priced healthcare after retirement.

 

[supernova72]

Hi Supernova72/Socca,

I completely agree about the "piece of mind" bit, I was always intending to payoff my mortgage at some point before my termination notice ever came, and this event has really made me think. I am of the mindset ultimate freedom comes from owning things and not going into debt. This is the American Dream, to own your property, no bank involved. Some will say this is a mistake, use the banks money at low interest rates to make more money. This is a valid business plan for those inclined. But how many people have lost their homes due this very situation? The financial institutions will see cash in front of their eyes to "invest for you", sure sounds good, it's making money at a higher rate than the interest you are paying. Then miss a mortgage payment or 2, then see your home go into foreclosure,

That said, paying off my home sometime in the future is still on the table, as is selling and downsizing. We singles used to have only 1 income, and now it's zero. I really think those keeping a mortgage into retirement have a large pool of income producing investments working in their favor, or spouse still working.

I am seeing the amount of payment/equity in my home is producing a lot of stress, it seems to be out of proportion to my other assets. A part of me wishes real estate in California could have appreciated at a much slower and rational level, this way everyone has a chance at home ownership.

Again, totally agree with the amount of stress a mortgage generates for me. I finally ordered my mortgage payoff information and plan to pull the trigger on January 1st for moving funds over for a payoff.

Besides creating $18K a year in cash flow it will give me more flexibility if I go back to work part-time on what that position will be.

I could probably live off my pension if I didn't want to travel and ticker with classic cars a bit but that is also part of my ER plan. You have nicer weather in CA that we do in WA. Right now it's 30F degrees but clear.

Good luck and congrats!

 

[pb4uski]

When thinking about the increase in cash flow as a result of not having a mortgage payment, just be sure to consider that there is a corresponding reduction in cash flow on lost investment earnings on the funds that you used to pay off the mortgage. many people focus on the former and conveniently overlook the latter. Just sayin.

 

[daylatedollarshort]

I applaud this sort of thinking, although that may reflect my having only limited data about it. I've long been fascinated by the concept I have a brother who lives off-grid half the time. (The other half he spends on the road for his j*b.) He loves it.

If you take this leap, I would be delighted to read updates about your experience.

I've been fascinated with this concept, too, ever since I stumbled accidentally on a homesteading magazine. We didn't end up going that route, but it gave us the idea how some households were living healthier, lower stress and more outdoorsy lives than we were with very low expenses. Now urban homesteading is one of my hobbies.

 

[supernova72]

When thinking about the increase in cash flow as a result of not having a mortgage payment, just be sure to consider that there is a corresponding reduction in cash flow on lost investment earnings on the funds that you used to pay off the mortgage. many people focus on the former and conveniently overlook the latter. Just sayin.

The investments I'm taking this from are a stable value and bond fund earning 2.1% and 2.4% respectively. Yes, I took this into account. My mortgage is at 4%. Even with the slight tax deduction reduction I should end up favorable in the end. But yea, my other funds have returned more than 4% YTD. For me it's more of a peace of mind than a math problem...