Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The whole "my house is paid off" thing is so overrated and not necessary to a comfortable retirement.

It is to us.

Right. If you’re not working during “retirement,” a paid mortgage is very nice. Not only does it decrease cash flow needs, but it’s savings for a future need, like a nursing home. For a lot of retirees, they aren’t trying to pile-up big stock market returns and leave an oversized sum to their kids. Rather, they’re just trying to live a peaceful life without burdening their kids. Peace of mind is where it’s at.

That's a very narrow minded an unsophisticated way of looking at things. We, for example, own a $1.8 million rowhouse with a basement apartment and are retired. We have a $700,000 mortgage on the house that we could pay off tomorrow. Instead, we rent out the English basement apartment for almost exactly what the mortgage is. Why would we want to be sitting on $1.8 million in home equity that we can't touch?

It's not always about the money. When I retire I don't want anyone in my basement. That sounds awful! I do have other vacation rentals, but a property management company deals with that. BTW I'm 42 and only have mortgage on my primary, which will be paid in 5 years. Yeah, it's a goal in retirement! I also bought the other 2 properties in cash.

Anonymous wrote:If DH and I stay in our GS 15 fed jobs until 60, our pension will be just shy of 11k a month. We will take social security at 62, so that’s additional monthly income. We can keep our fed health insurance and our house is paid off. Our last kid graduated college when I turn 56, so I’m hoping this will leave us with plenty of money to travel and enjoy retirement.

Why do this? On paper, it makes no sense.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The whole "my house is paid off" thing is so overrated and not necessary to a comfortable retirement.

It is to us.

Right. If you’re not working during “retirement,” a paid mortgage is very nice. Not only does it decrease cash flow needs, but it’s savings for a future need, like a nursing home. For a lot of retirees, they aren’t trying to pile-up big stock market returns and leave an oversized sum to their kids. Rather, they’re just trying to live a peaceful life without burdening their kids. Peace of mind is where it’s at.

That's a very narrow minded an unsophisticated way of looking at things. We, for example, own a $1.8 million rowhouse with a basement apartment and are retired. We have a $700,000 mortgage on the house that we could pay off tomorrow. Instead, we rent out the English basement apartment for almost exactly what the mortgage is. Why would we want to be sitting on $1.8 million in home equity that we can't touch?

There are always exceptions, and your situation may be one of them. Essentially, you have a built-in mortgage payment through your renter, but there is always the risk the unit sits empty for a while. But more importantly, the more margin one has for error, the more options one has. For those with more narrow ways to a good retirement, paying off one’s mortgage is a good rule-of-thumb.

Tying up a huge chunk of your wealth in an illiquid asset like a house strikes me as riskier and dramatically shrinks margin of error.

It’s okay for you to be comfortable with your renters. Not everyone is in your financial situation. I have 2 expensive houses, both of which have appreciated dramatically over the time I’ve had them, especially the beach house, but also have significant investments. The houses make up about 1/4 of my net worth and I am confident that I am sufficiently liquid that I won’t need to do a fire sale of either of them.

Anonymous wrote:The whole "my house is paid off" thing is so overrated and not necessary to a comfortable retirement.

It's absolutely necesasry to 90% of Americans who aren't wealthy retirees.

Anonymous wrote:No renters for us either. I don’t want to be someone’s phone call when something breaks. I also don’t want to share my space with someone else.

Stop being so defensive - it’s like we hit a nerve or something.

Right?!? BOW DOWN BEFORE MY RENTAL YOU UNSOPHISTICATED RUBES.

If I had a separate apartment in my house, I'd keep it for family and friends to use. You couldn't pay me any amount of money to let someone who doesn't fit into one of those categories live under my roof. No matter how good you think your screening is, you can't rule out the possibility that you'll have to share walls with someone disruptive. And if your tenant decides they're going to squat rather than pay rent, you're living in a nightmare.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The whole "my house is paid off" thing is so overrated and not necessary to a comfortable retirement.

It is to us.

Right. If you’re not working during “retirement,” a paid mortgage is very nice. Not only does it decrease cash flow needs, but it’s savings for a future need, like a nursing home. For a lot of retirees, they aren’t trying to pile-up big stock market returns and leave an oversized sum to their kids. Rather, they’re just trying to live a peaceful life without burdening their kids. Peace of mind is where it’s at.

That's a very narrow minded an unsophisticated way of looking at things. We, for example, own a $1.8 million rowhouse with a basement apartment and are retired. We have a $700,000 mortgage on the house that we could pay off tomorrow. Instead, we rent out the English basement apartment for almost exactly what the mortgage is. Why would we want to be sitting on $1.8 million in home equity that we can't touch?

There are always exceptions, and your situation may be one of them. Essentially, you have a built-in mortgage payment through your renter, but there is always the risk the unit sits empty for a while. But more importantly, the more margin one has for error, the more options one has. For those with more narrow ways to a good retirement, paying off one’s mortgage is a good rule-of-thumb.

Tying up a huge chunk of your wealth in an illiquid asset like a house strikes me as riskier and dramatically shrinks margin of error.

So what does the deposits look like?

~-7-9k cash a month?

Anonymous wrote:Gotta love a know it all who can't help but hijack a thread

??

Gotta love a know it all who can't help but hijack a thread

Anonymous wrote:

Anonymous wrote:Retiring income will be about 12k monthly BEFORE TAXES, our income will dropped, but we will no longer have to pay FICA and Social Security taxes right?? We won't have to worry about Health Care because its coved by my job. so we only have to pay FEDERAL INCOME AND STATE INCOME RIGHT? VIRGINIA?

What’s your monthly income before retiring?

19k family of 2

Anonymous wrote:

Anonymous wrote:Retiring income will be about 12k monthly BEFORE TAXES, our income will dropped, but we will no longer have to pay FICA and Social Security taxes right?? We won't have to worry about Health Care because its coved by my job. so we only have to pay FEDERAL INCOME AND STATE INCOME RIGHT? VIRGINIA?

What’s your monthly income before retiring?

About 19k before taxes

Anonymous wrote:Retiring income will be about 12k monthly BEFORE TAXES, our income will dropped, but we will no longer have to pay FICA and Social Security taxes right?? We won't have to worry about Health Care because its coved by my job. so we only have to pay FEDERAL INCOME AND STATE INCOME RIGHT? VIRGINIA?

What’s your monthly income before retiring?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The whole "my house is paid off" thing is so overrated and not necessary to a comfortable retirement.

It is to us.

Right. If you’re not working during “retirement,” a paid mortgage is very nice. Not only does it decrease cash flow needs, but it’s savings for a future need, like a nursing home. For a lot of retirees, they aren’t trying to pile-up big stock market returns and leave an oversized sum to their kids. Rather, they’re just trying to live a peaceful life without burdening their kids. Peace of mind is where it’s at.

That's a very narrow minded an unsophisticated way of looking at things. We, for example, own a $1.8 million rowhouse with a basement apartment and are retired. We have a $700,000 mortgage on the house that we could pay off tomorrow. Instead, we rent out the English basement apartment for almost exactly what the mortgage is. Why would we want to be sitting on $1.8 million in home equity that we can't touch?

Why pay a bank interest when you could be investing your monthly rental income and living debt free?

I thought good money management included a diverse portfolio or risky, and not so risky investments. If you have a paid off house, you can count it in the not so risky investments and use more of your other money in stocks and other more risky investments.

It’s also highly illiquid. The real estate market of the last few years has given everyone a false sense of security about the liquidity of real estate. When it takes months or years to sell property, the calculation is different.

Where do you live? I am in Bethesda and have lived here for 30 years at this point (longer, but that's how long I've owned a house here), and there has never been a time when houses sat for months. If houses are sitting for months they aren't priced right.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The whole "my house is paid off" thing is so overrated and not necessary to a comfortable retirement.

It is to us.

Right. If you’re not working during “retirement,” a paid mortgage is very nice. Not only does it decrease cash flow needs, but it’s savings for a future need, like a nursing home. For a lot of retirees, they aren’t trying to pile-up big stock market returns and leave an oversized sum to their kids. Rather, they’re just trying to live a peaceful life without burdening their kids. Peace of mind is where it’s at.

That's a very narrow minded an unsophisticated way of looking at things. We, for example, own a $1.8 million rowhouse with a basement apartment and are retired. We have a $700,000 mortgage on the house that we could pay off tomorrow. Instead, we rent out the English basement apartment for almost exactly what the mortgage is. Why would we want to be sitting on $1.8 million in home equity that we can't touch?

Good for you? I have had my primary home paid off since I was 41yrs old. I only carry mortgages on our investment properties.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The whole "my house is paid off" thing is so overrated and not necessary to a comfortable retirement.

It is to us.

Right. If you’re not working during “retirement,” a paid mortgage is very nice. Not only does it decrease cash flow needs, but it’s savings for a future need, like a nursing home. For a lot of retirees, they aren’t trying to pile-up big stock market returns and leave an oversized sum to their kids. Rather, they’re just trying to live a peaceful life without burdening their kids. Peace of mind is where it’s at.

That's a very narrow minded an unsophisticated way of looking at things. We, for example, own a $1.8 million rowhouse with a basement apartment and are retired. We have a $700,000 mortgage on the house that we could pay off tomorrow. Instead, we rent out the English basement apartment for almost exactly what the mortgage is. Why would we want to be sitting on $1.8 million in home equity that we can't touch?

Why pay a bank interest when you could be investing your monthly rental income and living debt free?

I thought good money management included a diverse portfolio or risky, and not so risky investments. If you have a paid off house, you can count it in the not so risky investments and use more of your other money in stocks and other more risky investments.

It’s also highly illiquid. The real estate market of the last few years has given everyone a false sense of security about the liquidity of real estate. When it takes months or years to sell property, the calculation is different.