tag:blogger.com,1999:blog-37147734.post2836953825575433195..comments2024-02-05T03:19:36.585-05:00Comments on Living Almost Large: Debt Free or Free of Fear?Living Almost Largehttp://www.blogger.com/profile/06594523259748625997noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-37147734.post-84966624135097545102007-12-18T10:17:00.000-05:002007-12-18T10:17:00.000-05:00My mortgage interest will always be higher than th...My mortgage interest will always be higher than the standard deduction by A LOT. I live in a HIGH COLA place, I pay $6k in property taxes as is. I doubt highly I will ever standard deduct again.<BR/><BR/>As for interest rates and tax deductibility, we make pretty good money. So our dedutability is 25 or 28% minimally, likely only to go up. We're not even close to the 15% bracket which might make it a different story. Even if we have kids it won't matter. We've phased out of a lot of child credits.<BR/><BR/>So I think we're not going to pay off the mortgage a day sooner than RETIREMENT.<BR/><BR/>I love how people talk about not having a mortgage in retirement, but that's in PARAGRAPH 2 of my post. <BR/><BR/>I also don't know we'd be home owners versus renter in retirement. I do believe there is a possiblity we'll just rent because it does save a lot of money. It depends on where we live, our health, and our lives at that point. I won't rule out renting, because it can make financial sense.Living Almost Largehttps://www.blogger.com/profile/06594523259748625997noreply@blogger.comtag:blogger.com,1999:blog-37147734.post-34569542701976889142007-12-17T14:50:00.000-05:002007-12-17T14:50:00.000-05:00I think you need to do what works for you and your...I think you need to do what works for you and your husband. <BR/><BR/>Not having a mortgage going into retirement is still a major achievment these days, so I reckon knowing you have the money to pay off the mortgage but choosing not to to pursue other investments (if you have no other debt) is a great place to be!Debt Dieterhttps://www.blogger.com/profile/11649389379384846763noreply@blogger.comtag:blogger.com,1999:blog-37147734.post-48666300150793681212007-12-17T10:32:00.000-05:002007-12-17T10:32:00.000-05:00I disagree with rbm411 - it's not "foolish" to pre...I disagree with rbm411 - it's not "foolish" to prepay your mortgage. When you pay interest on your mortgage, you use after-tax dollars. Yes, you then get a tax break on those dollars IF your deductions are greater than the standard deduction. However, your income from the bank is taxable income, so it becomes a wash. If your investments are in the stock market, you run the risk of losing your money in a downturn, and still have to pay off your mortgage. So, "foolish" to pay off your mortgage, I don't think so.<BR/><BR/>That said, if you are more comfortable carrying a mortgage while having a big chunk of money in a SAFE place; then by all means, do what makes you feel comfortable! My bank (ING) pays interest about equal to what my mortgage interest rate (after tax write-off) is, so it's a financial wash. Personally, I hope to have my mortgage paid off before my oldest starts college (in 13 years) so that I can use the mortgage money to pay tuition. That's where my comfort zone is, but everyone is different.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-37147734.post-77773207283898156032007-12-17T09:57:00.000-05:002007-12-17T09:57:00.000-05:00If you are a a disiplined saver/investor and you h...If you are a a disiplined saver/investor and you have the money to pay off your mortgage it would be foolish to do so. <BR/><BR/>First you get to deduct the interest from your income. Second you get to earn interest on the money in the bank so in effect you are using free money provided by the bank. Additionally, money in a house is passive. It does not generate more money. Money in a bank does.Anonymousnoreply@blogger.com