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Old 09-25-2020, 09:33 PM   #41
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^^^ Strange. Very strange.

I guess if you don't have anything useful to contribute then you just post a bit of crap.
Thank you. 👍
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Old 09-26-2020, 03:26 AM   #42
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Caveated with the other cautions about having enough cash, I'd be in the "pay it off + HELOC" camp.

There is zero chance you will find a risk-free rate of return higher than your mortgage interest rate (even net of tax benefits) anytime in the next few years.

(Full disclosure: I am super debt adverse. I paid off my mortgage in my early 40s. Don't regret it, tho I do fully recognize my net worth would be higher today if I had just kept the mortgage for the long haul. I also think I would have had an ulcer worrying about protecting my family through the various economic craziness.)
To me that is always the right reference point in these things.
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Old 09-27-2020, 07:43 PM   #43
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We still have a 83k mortgage with a house worth 400k and a beach condo worth 200k. Are there any tax benefits to keeping a mortgage?
Like not being able to take gifts to charities off your taxes if you get rid of it?
Last year was the first year we were not able to take our charitable deductions off of our taxes. Not exactly sure why.
Let’s have some discussion on the tax implications.
We’ve been retired for 10 years and haven’t had to take any money from retirement accounts.
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Old 09-27-2020, 09:15 PM   #44
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I would agree with others that recommend paying off your mortgage as the likely best course given your situation (age and how close you are to retirement).
Before enacting your plan, I would double check your calculated retirement budget, emergency fund/bucket, and any projected expenses on your home.

I did retire our mortgage last year (about 8 years early). We did replace our furnace and water heater in the year prior. This year we needed to replace the roof and gutters and several trees, so I was very glad that we had made sure to have extra in the emergency fund to cover some big expenses.

The other psychological benefit that I found was that once I no longer had any debt, I became very motivated to not accumulate debt again. It made it easier to save (with money left over after paying for home insurance and tax on our home). I agree with getting the HELOC before you retire, but hopefully you will not want to use it (just have it around for security).
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Old 09-27-2020, 10:03 PM   #45
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I would agree with others that recommend paying off your mortgage as the likely best course given your situation (age and how close you are to retirement). Before enacting your plan, I would double check your calculated retirement budget, emergency fund/bucket, and any projected expenses on your home.

Yes, I continually review everything like the budget/bucket/expense topics you mentioned, and more. Paying off the balance would be a great feeling, but of course we need to ensure we have enough reserves to get us through the unexpected.
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Old 09-28-2020, 08:39 AM   #46
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Originally Posted by kbst View Post
We still have a 83k mortgage with a house worth 400k and a beach condo worth 200k. Are there any tax benefits to keeping a mortgage?
Like not being able to take gifts to charities off your taxes if you get rid of it?
Last year was the first year we were not able to take our charitable deductions off of our taxes. Not exactly sure why.
Let’s have some discussion on the tax implications.
We’ve been retired for 10 years and haven’t had to take any money from retirement accounts.
You probably couldn't take chariable deductions off of your taxes because you didn't have enough in itemized deductions... it is common under the new tax law that more people use the standard deduction.

Let's say that the annual interest on your $83k mortgage is $3,500. The standard deduction for a married couple under age 65 in 2020 is $24,800. So you would need over $21,300 of deductble medical expenses, property taxes, state income taxes, charitable contributions, etc to get any benefit from itemized deductions.

And if one or both of you are over 65 then those amounts go up $1,300 or $2,600.
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Old 09-28-2020, 10:50 AM   #47
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And remember that deductible medical expense are those above 7.5% of your taxable income.
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Old 09-28-2020, 10:58 AM   #48
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Also now there is a $10,000 limit on the state and local tax deduction.
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Old 09-28-2020, 08:58 PM   #49
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That's a no brainer. Pay off mortgage. I paid mine off in year 11 of a 30 year mortgage. Then I poured more monthly into mutual funds. FIRE'd 13 years later.
Ive actually done this twice now since retirement. After each pay off I start dollar cost averaging back into a mutual fund with the money that went to a mortgage.

Im probably done with this though, at 66 my next move will be a downsize I think.
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Old 09-30-2020, 09:49 PM   #50
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Well for one I don’t think anyone should retire with any mortgage debt so that tells you my opinion where to use it.
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Old 10-10-2020, 08:49 PM   #51
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Depends on whether you might need that money for something else. If it's likely you will, keep the cash handy. If it's less likely, you could pay it off and get a HELOC just in case you need to tap the equity.


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Old 10-11-2020, 10:43 AM   #52
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Thanks to this thread, I did a lot of rethinking and put another 6 figure chunk against our mortgage. What a deal, they mis-applied it to a series of future payments and balance against principle. I called them on it and they readjusted it to all principle. Then in their wisdom they reapplied it to more payments and another chunk against principle. We now got twice the payoff for the one transfer. I called them twice to advise them of the error, but for now payoff is only a short haul away.
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Old 10-12-2020, 05:20 AM   #53
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Don't worry, they will find their error and correct it.
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Old 10-12-2020, 06:24 AM   #54
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+1 they will eventually find it and correct it. But it might be fun to pay the rest of it off and hope that they send you a lien release and you can record the lien release before they find it.
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Old 10-12-2020, 12:25 PM   #55
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+1 they will eventually find it and correct it. But it might be fun to pay the rest of it off and hope that they send you a lien release and you can record the lien release before they find it.
That would be a fun test of their systems! I think I should do a payoff request and see what happens......
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Old 10-12-2020, 08:54 PM   #56
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+1 they will eventually find it and correct it. But it might be fun to pay the rest of it off and hope that they send you a lien release and you can record the lien release before they find it.
Wouldn't work. They would just say that they issued the release erroneously and have it reversed.

Would be fun, though. You know that somebody there would be sweating bullets.
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