Skip to main content
No. of Recommendations: 1
I'm not much into the whole planning thing yet, but aren't there circumstances like that? Circumstances in which you would be a lot better off having kept a paid off house instead of having the cash or other liquid asset from either selling the house or paying the mortgage as slowly as possible?

The usual reason it would make sense to pay off the house entirely is to need less monthly cash flow. That means you can retire on a smaller asset base, and live in your house. Note that this implicitly assumes that your own retirement income is a bigger concern than what you leave in your estate.

That won't be a compelling argument for all circumstances. In particular, it is not a compelling argument for the circumstance of having plenty of assets, which is what people arguing for keeping the mortgage seem to typically assume. But if it's a case of living on just Social Security is *almost* practical, it might become practical with no mortgage.

YMMV. I paid off my mortgage years and many life changes ago, and I don't see that it makes any sense for me to borrow against my house when I have good enough liquidity already. Instead of paying a mortgage where the interest is only useful for federal tax deductions, I'd rather be dumping that cash flow into my 401(k) to reduce my current state and federal taxes. I anticipate of having a lower marginal federal tax rate in retirement, and the first $20K of retirement account distributions are tax-free on the NY side once I'm over 59 and a half years old.

Patzer
Print the post  

Announcements

UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.