Spouse Insistent on Paying Mortgage Off Early

[Anonymous]

Whatever lets him sleep at night. Some people need certain financial security to feel ok.

So, you go ahead and maxout your 401k
and let him use his income to pay down the mortgage.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is the paid-off rental something you would not mind living in yourself? If not, i agree with your spouse. It makes good sense pay off your current home while you can. You never know what the future holds, job loss or illness.

So much this. When you are in your 20s and 30s and employed and healthy and things are going well, it’s easy to feel like you will be able to keep going like that indefinitely.

I’m in my upper 40s now and if I were laid off, I don’t think I could find a job paying close to what I make now. And I just don’t have it in me to hustle again like I did to get where I am. Having my house paid off would be so much better and allow me to weather storms. And the storms are looking likely and severe at this time.

Money is money. Weathering storms with a $500K mortgage paid off, or alternatively $500K+ additional money in various low-yielding, but low risk investments? I'm not sure number one is preferable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is the paid-off rental something you would not mind living in yourself? If not, i agree with your spouse. It makes good sense pay off your current home while you can. You never know what the future holds, job loss or illness.

So much this. When you are in your 20s and 30s and employed and healthy and things are going well, it’s easy to feel like you will be able to keep going like that indefinitely.

I’m in my upper 40s now and if I were laid off, I don’t think I could find a job paying close to what I make now. And I just don’t have it in me to hustle again like I did to get where I am. Having my house paid off would be so much better and allow me to weather storms. And the storms are looking likely and severe at this time.

Money is money. Weathering storms with a $500K mortgage paid off, or alternatively $500K+ additional money in various low-yielding, but low risk investments? I'm not sure number one is preferable.

This.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is the paid-off rental something you would not mind living in yourself? If not, i agree with your spouse. It makes good sense pay off your current home while you can. You never know what the future holds, job loss or illness.

So much this. When you are in your 20s and 30s and employed and healthy and things are going well, it’s easy to feel like you will be able to keep going like that indefinitely.

I’m in my upper 40s now and if I were laid off, I don’t think I could find a job paying close to what I make now. And I just don’t have it in me to hustle again like I did to get where I am. Having my house paid off would be so much better and allow me to weather storms. And the storms are looking likely and severe at this time.

Money is money. Weathering storms with a $500K mortgage paid off, or alternatively $500K+ additional money in various low-yielding, but low risk investments? I'm not sure number one is preferable.

Psychologically it can be quite different. If you lose a job at 45 and have a monthly expense total of x + $4000 mortgage, along with $500K in the bank, vs a monthly expense total of X without the mortgage, some people feel much better with situation a vs situation B or vice versa. Admittedly, they are the same situation, but it's okay for psychology and what you're comfortable with to be a factor in your decisions. Thus, the OP really should, if she values her marriage, try to understand her husband's perspective and let it play a part in the decision their family makes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is the paid-off rental something you would not mind living in yourself? If not, i agree with your spouse. It makes good sense pay off your current home while you can. You never know what the future holds, job loss or illness.

So much this. When you are in your 20s and 30s and employed and healthy and things are going well, it’s easy to feel like you will be able to keep going like that indefinitely.

I’m in my upper 40s now and if I were laid off, I don’t think I could find a job paying close to what I make now. And I just don’t have it in me to hustle again like I did to get where I am. Having my house paid off would be so much better and allow me to weather storms. And the storms are looking likely and severe at this time.

Money is money. Weathering storms with a $500K mortgage paid off, or alternatively $500K+ additional money in various low-yielding, but low risk investments? I'm not sure number one is preferable.

Psychologically it can be quite different. If you lose a job at 45 and have a monthly expense total of x + $4000 mortgage, along with $500K in the bank, vs a monthly expense total of X without the mortgage, some people feel much better with situation a vs situation B or vice versa. Admittedly, they are the same situation, but it's okay for psychology and what you're comfortable with to be a factor in your decisions. Thus, the OP really should, if she values her marriage, try to understand her husband's perspective and let it play a part in the decision their family makes.

Unless you have to move for your next job, in which case a paid-off house is a hindrance and potentially loses value at sale. Liquidity is usually safer.

I don't like that PPs supporting the DH are saying "yeah, OP is financially correct but DH's subjective feelings deserve compromise." How about DH gets financially literate so his feelings don't drag down the family.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is the paid-off rental something you would not mind living in yourself? If not, i agree with your spouse. It makes good sense pay off your current home while you can. You never know what the future holds, job loss or illness.

So much this. When you are in your 20s and 30s and employed and healthy and things are going well, it’s easy to feel like you will be able to keep going like that indefinitely.

I’m in my upper 40s now and if I were laid off, I don’t think I could find a job paying close to what I make now. And I just don’t have it in me to hustle again like I did to get where I am. Having my house paid off would be so much better and allow me to weather storms. And the storms are looking likely and severe at this time.

Money is money. Weathering storms with a $500K mortgage paid off, or alternatively $500K+ additional money in various low-yielding, but low risk investments? I'm not sure number one is preferable.

Psychologically it can be quite different. If you lose a job at 45 and have a monthly expense total of x + $4000 mortgage, along with $500K in the bank, vs a monthly expense total of X without the mortgage, some people feel much better with situation a vs situation B or vice versa. Admittedly, they are the same situation, but it's okay for psychology and what you're comfortable with to be a factor in your decisions. Thus, the OP really should, if she values her marriage, try to understand her husband's perspective and let it play a part in the decision their family makes.

I think it's deeply strange (and yet not surprising at all) how many posters are telling OP she is the problem for not compromising when her OP makes it very clear that her husband is the one getting his way already on this topic. They are not maxing out their retirement. He is prepaying the mortgage. Her perspective is not being heard in this marriage, not his.

[Anonymous]

Uh, 5% is not cheap. With the interest rate cut today, risk-free investments like cash, money markets, etc. are going to have yields of 3.x%. After paying taxes, you're going to be down in the mid 2s. Plus, stocks are at all-time highs.

So, yeah, a 5% tax-free, guaranteed return is a very good deal. Frankly, your husband should be the one coming on here complaining about his wife's poor financial choices.

[Anonymous]

My wife and I joke how about how we should never pay off our 2.75% mortgage because our money does better in a HYSA.

5% is tough tho at that debt level. That’s a lot of interest.

[Anonymous]

I do YNAB and we work to meet both of our goals.

[Anonymous]

Liquidity is king, always keep your assets outside of your house. Use the income from your investments to help pay the mortgage if you’re nervous

[Anonymous]

Anonymous wrote:Liquidity is king, always keep your assets outside of your house. Use the income from your investments to help pay the mortgage if you’re nervous

Yup. Liquidity and income is the key to wealth and security.

Even at 5%, this decision is easy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Stay away from that 401k past the match. This will be earned income and taxed way higher than regular investment account. High 401k will cause lots of troubles down the road.
Where is your Roth?
So that you know, regular investment account can be taxed at 0% plus state if even applicable. 401k's tax deduction cannot overcome the long term negatives of the account.
As for paying off mortgage vs Roth, tell him to work extra job if paying off mortgage is so important.

This is tinfoil hat stuff.

DP. PP is correct. It's kind of amazing how many people don't understand how 401(k) withdrawals are taxed (vs. non-qualified accounts).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is the paid-off rental something you would not mind living in yourself? If not, i agree with your spouse. It makes good sense pay off your current home while you can. You never know what the future holds, job loss or illness.

So much this. When you are in your 20s and 30s and employed and healthy and things are going well, it’s easy to feel like you will be able to keep going like that indefinitely.

I’m in my upper 40s now and if I were laid off, I don’t think I could find a job paying close to what I make now. And I just don’t have it in me to hustle again like I did to get where I am. Having my house paid off would be so much better and allow me to weather storms. And the storms are looking likely and severe at this time.

Money is money. Weathering storms with a $500K mortgage paid off, or alternatively $500K+ additional money in various low-yielding, but low risk investments? I'm not sure number one is preferable.

Well one definately is preferable. Unless you already have a 12month+ emergency fund, you don't pay off the mortgage. So that the money is liquid and easily accessible. You cannot tap into your home if you are unemployed---nobody will let you remortgage the home or setup a Home equity line then. So while yes, paying of the mortgage is freeing (I haven't had a mortgage for almost 15 years), I didn't pay off our first home until we had 10x what the mortgage payoff was outside of our retirement funds (with 6-9 months in EF/easily accessible cash).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is the paid-off rental something you would not mind living in yourself? If not, i agree with your spouse. It makes good sense pay off your current home while you can. You never know what the future holds, job loss or illness.

So much this. When you are in your 20s and 30s and employed and healthy and things are going well, it’s easy to feel like you will be able to keep going like that indefinitely.

I’m in my upper 40s now and if I were laid off, I don’t think I could find a job paying close to what I make now. And I just don’t have it in me to hustle again like I did to get where I am. Having my house paid off would be so much better and allow me to weather storms. And the storms are looking likely and severe at this time.

Money is money. Weathering storms with a $500K mortgage paid off, or alternatively $500K+ additional money in various low-yielding, but low risk investments? I'm not sure number one is preferable.

Psychologically it can be quite different. If you lose a job at 45 and have a monthly expense total of x + $4000 mortgage, along with $500K in the bank, vs a monthly expense total of X without the mortgage, some people feel much better with situation a vs situation B or vice versa. Admittedly, they are the same situation, but it's okay for psychology and what you're comfortable with to be a factor in your decisions. Thus, the OP really should, if she values her marriage, try to understand her husband's perspective and let it play a part in the decision their family makes.

I think it's deeply strange (and yet not surprising at all) how many posters are telling OP she is the problem for not compromising when her OP makes it very clear that her husband is the one getting his way already on this topic. They are not maxing out their retirement. He is prepaying the mortgage. Her perspective is not being heard in this marriage, not his.

yeah, you don't pay off a mortgage early until you have fully funded retirement yearly (max out 401K and IRA options) and fully saved for college

[Anonymous]

I paid mine off earlier this year. And I’m so glad I did. Furloughed since 10/1 and no guarantee back pay will come. Peace of mind can’t be understated.