Asking someone if you should pay off your mortgage early is like asking if you should paint a living room sage green, according to one Business Insider article. I kind of like sage green, especially when I’m in an earthy mood. But it definitely comes down to personal preference. If I don’t have to pay anything than property taxes and possibly home owner’s insurance, I will have a better cash flow in retirement and the years leading up to retirement. According to the author of the Business insider article, a person has to figure out whether they agree more with reason to pay off a home early or reasons not to pay it off early.
Capitalizing on the company match
My company no longer offers a 401(k) match. I’m sure a lot of other people are in the same situation. Of course, it’s always better to contribute to a 401(k) up to the match, but it’s not usually a lot of money.
Paying off other debt
It’s also a good idea to pay off high interest rate credit cards and other debt. Most people who want to pay down a mortgage have a debt-free lifestyle in general. I don’t let my children take out student loan debt. I don’t run up credit cards.
Establishing an emergency fund
I simultaneously build up my emergency fund while paying down my mortgage. I often reward myself for saving extra money by spending an equal amount on mortgage debt repayment. I don’t fund my Roth IRA until I make an extra mortgage payment.
Getting a guaranteed return
Other arguments for not paying down your mortgage make nonsense expect in fantasy land. You may be confident that you can get better returns on your money elsewhere, but there is no guarantee. I can get a guaranteed return on my money by paying down any debt. Plus, I won’t have to pay taxes on the extra income needed to pay the mortgage every month when I’m retired.
I most definitely like the idea of having a paid-off mortgage even though many experts still argue against it. I believe having a paid-off mortgage will protect me as things become more expensive due to inflation. I like being able to sleep at night without worrying about a mortgage until the day I die. It’s pretty clear I fall in the “pay-off-your-mortgage-early camp,” but everyone is in a different situation. I am on track to pay off my home in 15 years. I have a retired neighbor who also bought a home 10 years ago, but is still paying on the 30-year plan. If his mortgage could be paid off 5 instead of 20 years from now, he’d be the happiest neighbor on my block.
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