AlabaMalaysia
Dryer sheet aficionado
- Joined
- Jan 25, 2022
- Messages
- 46
Thinking of building a CD ladder in my brokerage account to pay our mortgage in early retirement. I have never bought CDs before but with recent 5% yields I wanted to see if others thought this is a good idea and lend me any tips or things I need to think about that I may be ignorant of.
Wife and I plan to FI in about 2.5 yrs ages 36/38 currently. Withdraw rate of assets will only need to be 2.5% due to us over saving than the regular 3-4%. We refinanced our home basically at bottom for 2.3% 30 yr on 85k. In the last 3-5 months of work, we originally were planning to save the cash and pay off the home as kinda the last check mark, however wouldn't it be wiser to save up say $110,000 cash and buy a CD ladder and use that cash to pay the monthly mortgage payment to have the added flexibility over time?
I was thinking of buying the CDs at Fidelity in my brokerage account and paying the monthly minimum on the mortgage while that makes sense. If rates ever tanked, we could at anytime pay off the house but while rates are this good vs our financed rate make the spread while still having that cash vs all gone to the loan pay off. Any things I need to know about with CDs for this usage, downsides, lessons learned, tips/tricks, or should I look at other instruments? Thank You for any insights.
Wife and I plan to FI in about 2.5 yrs ages 36/38 currently. Withdraw rate of assets will only need to be 2.5% due to us over saving than the regular 3-4%. We refinanced our home basically at bottom for 2.3% 30 yr on 85k. In the last 3-5 months of work, we originally were planning to save the cash and pay off the home as kinda the last check mark, however wouldn't it be wiser to save up say $110,000 cash and buy a CD ladder and use that cash to pay the monthly mortgage payment to have the added flexibility over time?
I was thinking of buying the CDs at Fidelity in my brokerage account and paying the monthly minimum on the mortgage while that makes sense. If rates ever tanked, we could at anytime pay off the house but while rates are this good vs our financed rate make the spread while still having that cash vs all gone to the loan pay off. Any things I need to know about with CDs for this usage, downsides, lessons learned, tips/tricks, or should I look at other instruments? Thank You for any insights.