golfnut
Full time employment: Posting here.
I realize there is alot of threads regarding the pros/cons of paying off the mortgage. Figured I would outline some thoughts here regarding our situations.
- Have approx. $70,000 left on a 4.75% fixed mortgage. House is probably worth $475,000
- Have apprx. $190,000 cash sitting in various money mkt. funds basically making very little interest.
- Wife and I are thinking of moving in 2012 after son graduates from high school. Plan on downsizing house and paying cash (maybe around $300,000).
Should we pay it off or not?? We cannot decide.
- To complicate matters, I am almost at the end of my rope as far as my job goes. Will turn 55 yrs. old later this year. If I make it to my 55th bday, I will qualify for employer retirement subsidized healthcare. This will cost be about $7,500 per year with a $4,000/$8,000 (family) deductible. In my opinion, not that great of a deal.
Given the above, we are really struggling with the decision to pay off the mortgage. As far as savings go, we have enough in a 529 plan for our son to attend a state university. I will have a NON-COLAED pension paying about $7,800 a year and have enough $$ ininvestments to withdraw (according to FIRECALC) approx. $48,000 per year if we do not pay off the mortgage or approx. $45,000 if we pay off the mortgage. Wife works part time (about $14,000). I would also look for another job realizing I probably will not bring home what I bring in now.
Guess it just bothers me to have a good bit of cash just "sitting there" but at the same time it is comforting to know it probably represents approx. 3 years of living expenses.
Also, regarding 401 distributions, can you withdraw in the year you turn 55 yrs old without the 10% penalty applying. I looked it up in the IRS website and that is what it stated. However, in the employer's 401 summary, it mentions you have to be 55 yrs. old before the 10% penalty does not apply. Any 401K experts out there? I would imagine the IRS provisions would rule here.
I know there is alot here but any comments/insights would be most appreciated.
Thanks,
Golfnut
- Have approx. $70,000 left on a 4.75% fixed mortgage. House is probably worth $475,000
- Have apprx. $190,000 cash sitting in various money mkt. funds basically making very little interest.
- Wife and I are thinking of moving in 2012 after son graduates from high school. Plan on downsizing house and paying cash (maybe around $300,000).
Should we pay it off or not?? We cannot decide.
- To complicate matters, I am almost at the end of my rope as far as my job goes. Will turn 55 yrs. old later this year. If I make it to my 55th bday, I will qualify for employer retirement subsidized healthcare. This will cost be about $7,500 per year with a $4,000/$8,000 (family) deductible. In my opinion, not that great of a deal.
Given the above, we are really struggling with the decision to pay off the mortgage. As far as savings go, we have enough in a 529 plan for our son to attend a state university. I will have a NON-COLAED pension paying about $7,800 a year and have enough $$ ininvestments to withdraw (according to FIRECALC) approx. $48,000 per year if we do not pay off the mortgage or approx. $45,000 if we pay off the mortgage. Wife works part time (about $14,000). I would also look for another job realizing I probably will not bring home what I bring in now.
Guess it just bothers me to have a good bit of cash just "sitting there" but at the same time it is comforting to know it probably represents approx. 3 years of living expenses.
Also, regarding 401 distributions, can you withdraw in the year you turn 55 yrs old without the 10% penalty applying. I looked it up in the IRS website and that is what it stated. However, in the employer's 401 summary, it mentions you have to be 55 yrs. old before the 10% penalty does not apply. Any 401K experts out there? I would imagine the IRS provisions would rule here.
I know there is alot here but any comments/insights would be most appreciated.
Thanks,
Golfnut