RetiredHappy
Thinks s/he gets paid by the post
- Joined
- Jun 27, 2021
- Messages
- 2,354
This thread is by courtesy of @Koolau as he suggested we can spend all day discussing to pay off mortgage in retirement or not. A little tongue in cheek...
So, seriously, we have a mortgage payment, which amounts to 5% of our income and expenses, so yes, peanuts. We took a 30-year loan in 2021 at 2.75%. Because we have ridiculously high medical expenses, about $35K a year, we are itemizing deductions and mortgage interests becomes deductible, when we file federal income tax returns. However, I turn 65 in 3 years' time and will get on Medicare. It appears that we will take standard deductions so mortgage interests will no longer be deducted. This assumes that tax laws are not going to change much over the next few years. To pay off our mortgage, we will incur capital gains tax from selling positions in our taxable account. I am incline to do nothing and keep making mortgage payments, since it's only 5% of our income and expenses.
So, seriously, we have a mortgage payment, which amounts to 5% of our income and expenses, so yes, peanuts. We took a 30-year loan in 2021 at 2.75%. Because we have ridiculously high medical expenses, about $35K a year, we are itemizing deductions and mortgage interests becomes deductible, when we file federal income tax returns. However, I turn 65 in 3 years' time and will get on Medicare. It appears that we will take standard deductions so mortgage interests will no longer be deducted. This assumes that tax laws are not going to change much over the next few years. To pay off our mortgage, we will incur capital gains tax from selling positions in our taxable account. I am incline to do nothing and keep making mortgage payments, since it's only 5% of our income and expenses.
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