Anonymous wrote:

Anonymous wrote:We are getting an unexpected windfall that we don’t need. Retirement and 529 accounts are maxed out. I know typically people say invest it, but if we have a mortgage with a 6.25% interest rate it makes sense to reduce that right? I don’t know where I can get that kind of guaranteed return. Or should I take a risk and put it in the stock market or PE?

There is no such thing.

Not true. Even if OP hasn’t hit maximum contributions, blindly pumping all of your savings into qualified accounts is usually short sighted from a tax perspective.

https://www.kiplinger.com/article/retirement/t055-c032-s014-can-you-save-too-much-in-your-401-k.html

Anonymous wrote:

Anonymous wrote:to everyone saying "pay off the mortgage", isn't it better to keep some sort of mortgage so you can write off the interest? I mean, sure, knock it down a bit, but a $100k mortgage at a low interest rate means tax savings in most situations, as opposed to a fully paid off house, no??

I am generally financially illiterate, but I never understood how the tax deduction was better than not having a monthly mortgage payment at all.

It’s not. It’s like saying I hope all my stocks go down so I can sell them off and get a tax deduction.

Anonymous wrote:to everyone saying "pay off the mortgage", isn't it better to keep some sort of mortgage so you can write off the interest? I mean, sure, knock it down a bit, but a $100k mortgage at a low interest rate means tax savings in most situations, as opposed to a fully paid off house, no??

I am generally financially illiterate, but I never understood how the tax deduction was better than not having a monthly mortgage payment at all.

You do half to mortgage and other half to stocks and tells us in 5 years how it worked out.

Anonymous wrote:

Anonymous wrote:to everyone saying "pay off the mortgage", isn't it better to keep some sort of mortgage so you can write off the interest? I mean, sure, knock it down a bit, but a $100k mortgage at a low interest rate means tax savings in most situations, as opposed to a fully paid off house, no??

Talk about financially illiterate!!! You know that you are only deducting a tiny portion of what you pay in interest, right? It's not a credit of the full amount of interest you pay, LOL!! If you pay off a portion of the mortgage, you are significantly reducing the interest you'll pay over the lifetime of the loan. That's a LOT more than the pennies you deduct from your taxes annually.

No to mention, if you have $100k on your mortgage, it is almost certain that the standard deduction is better than itemizing.

Anonymous wrote:to everyone saying "pay off the mortgage", isn't it better to keep some sort of mortgage so you can write off the interest? I mean, sure, knock it down a bit, but a $100k mortgage at a low interest rate means tax savings in most situations, as opposed to a fully paid off house, no??

Talk about financially illiterate!!! You know that you are only deducting a tiny portion of what you pay in interest, right? It's not a credit of the full amount of interest you pay, LOL!! If you pay off a portion of the mortgage, you are significantly reducing the interest you'll pay over the lifetime of the loan. That's a LOT more than the pennies you deduct from your taxes annually.

Anonymous wrote:When did you get your mortgage? When will it be paid off? How much is left?

Presumably with a 6.25% interest rate, it's a recent mortgage. I would also recast to lower your monthly payments and then establish a "set it and forget it" automatic transfer of the amount saved each month into your investment account. This way you're not dumping $300K into the market all at once.

How's your marriage OP? If you put it into the mortgage your spouse would ride off with half of it in the event of a divorce.

Anonymous wrote:to everyone saying "pay off the mortgage", isn't it better to keep some sort of mortgage so you can write off the interest? I mean, sure, knock it down a bit, but a $100k mortgage at a low interest rate means tax savings in most situations, as opposed to a fully paid off house, no??

Mortgage interest is a limited tax deduction. This means that if you pay $10k of interest to the bank, you can deduct that and save on your taxes. However, you have still paid the full $10k to the bank. If you no longer have a mortgage, yes, your tax bill may increase, however, you will no longer be paying the actual mortgage interest to the bank.

OP—at that rate and if all your savings are on track and your budget is solid, I might pay down the mortgage if it feels good. Historically it hasn’t been the answer that results in the most wealth, but not everything is about financial optimization.

Anonymous wrote:to everyone saying "pay off the mortgage", isn't it better to keep some sort of mortgage so you can write off the interest? I mean, sure, knock it down a bit, but a $100k mortgage at a low interest rate means tax savings in most situations, as opposed to a fully paid off house, no??

It lowers your effective interest rate, but you are still paying more than you would with no mortgage.

Anonymous wrote:to everyone saying "pay off the mortgage", isn't it better to keep some sort of mortgage so you can write off the interest? I mean, sure, knock it down a bit, but a $100k mortgage at a low interest rate means tax savings in most situations, as opposed to a fully paid off house, no??

No

to everyone saying "pay off the mortgage", isn't it better to keep some sort of mortgage so you can write off the interest? I mean, sure, knock it down a bit, but a $100k mortgage at a low interest rate means tax savings in most situations, as opposed to a fully paid off house, no??

Consider making some sizable charitable donations to your favorite organizations/causes.

Beat it all on Argentina.

go on an epic vacation, then invest 30% of the remainder and use the rest to pay down mortgage