So I've been doing a lot of reading on paying off your mortgage vs keeping those dollars invested. I get it that in almost all situations the math makes sense to continue to pay on the mortgage and keep your money in your investments. On the other hand, the feeling of being debt free and having a paid off house must be a wonderful one.
Lets hear from those that have paid off their house early despite the math. Why did you do it? Why not?
I'm leaning towards paying off mine before I FIRE in 2 years but would love to hear thoughts from other FIRE minded people.
My situation, 37 years old, single no kids, debt free beside mortgage, 2 years from 20 year military retirement. Planning to continue my self employment/side hustles after that. The plan is not to work for anyone else just myself, travel some and visit family after 20 years in service.
In two years I'll have a cola adjusted mil retirement around $2700 a month.
Medical benefits
Rental income and self employment income which I live off of now.
My entire military paycheck is put into investments and will continue until retirement. After retirement, my investment contributions will be significantly reduced from what they are now.
Right now I max a Roth IRA with VG.
I have been maxing TSP for 10 years or so but recently last month cut that in half to put more into taxable accounts for the retirement bridge if needed (39-59 years old or when I can draw from TSP)and possibly paying off the mortgage before I retire.
I put $4K a month in a VG taxable account.
Expenses now with mortgage are $3200 a month.
I have an emergency fund.
I've rented cheaply and invested for many years and just bought my first home/rental all in one. Ended up getting 6 acres, a 3 bedroom house which is a rental (occupied for the last 13 years, so I inherited a good tenant also)and a barndominium/shop house where I live on the backside of the property all for $215K. I put 25% down and was able to get a 15 yr mortgage for 3%.
Right now I'm paying $375 extra a month towards principle with the capability to put $1175 extra toward principle.
I've never been in debt and despise it, so I'm leaning towards contributing another $100K to my taxable account over the next two years and paying off the mortgage before I retire from the military.
The mortgage balance in 2 years with the $375 extra a month will be $133K.
With the $1175 extra a month in 2 years it will be $115K.
I could pay both of these amounts off free and clear and have around estimated $140K left in taxable.
With a paid off mortgage, I could easily live off just my military retirement and any self employment/side hustle money would be extra and be FIRE'd.
Now I know the math probably says my total net worth will be more in the long run if I just keep paying on the mortgage and if the market tanks right before I pay it off and my taxable account balance goes down to nothing this will be a problem and I will just continue paying monthly on the mortgage at that point.
I would love to hear thoughts on my plan/situation and hear what would you do in my shoes? If I left any vital information off please let me know. Thank you for your replies.
Lets hear from those that have paid off their house early despite the math. Why did you do it? Why not?
I'm leaning towards paying off mine before I FIRE in 2 years but would love to hear thoughts from other FIRE minded people.
My situation, 37 years old, single no kids, debt free beside mortgage, 2 years from 20 year military retirement. Planning to continue my self employment/side hustles after that. The plan is not to work for anyone else just myself, travel some and visit family after 20 years in service.
In two years I'll have a cola adjusted mil retirement around $2700 a month.
Medical benefits
Rental income and self employment income which I live off of now.
My entire military paycheck is put into investments and will continue until retirement. After retirement, my investment contributions will be significantly reduced from what they are now.
Right now I max a Roth IRA with VG.
I have been maxing TSP for 10 years or so but recently last month cut that in half to put more into taxable accounts for the retirement bridge if needed (39-59 years old or when I can draw from TSP)and possibly paying off the mortgage before I retire.
I put $4K a month in a VG taxable account.
Expenses now with mortgage are $3200 a month.
I have an emergency fund.
I've rented cheaply and invested for many years and just bought my first home/rental all in one. Ended up getting 6 acres, a 3 bedroom house which is a rental (occupied for the last 13 years, so I inherited a good tenant also)and a barndominium/shop house where I live on the backside of the property all for $215K. I put 25% down and was able to get a 15 yr mortgage for 3%.
Right now I'm paying $375 extra a month towards principle with the capability to put $1175 extra toward principle.
I've never been in debt and despise it, so I'm leaning towards contributing another $100K to my taxable account over the next two years and paying off the mortgage before I retire from the military.
The mortgage balance in 2 years with the $375 extra a month will be $133K.
With the $1175 extra a month in 2 years it will be $115K.
I could pay both of these amounts off free and clear and have around estimated $140K left in taxable.
With a paid off mortgage, I could easily live off just my military retirement and any self employment/side hustle money would be extra and be FIRE'd.
Now I know the math probably says my total net worth will be more in the long run if I just keep paying on the mortgage and if the market tanks right before I pay it off and my taxable account balance goes down to nothing this will be a problem and I will just continue paying monthly on the mortgage at that point.
I would love to hear thoughts on my plan/situation and hear what would you do in my shoes? If I left any vital information off please let me know. Thank you for your replies.