My wife and I have $1.8M saved and earn $400K. I want to pay off our 20-year mortgage before we retire. She says no

11 months ago 157

Dear Quentin,

My woman and I person done precise good moving successful healthcare the past 25 years. We’ve ever taken vantage of 401(k) and 403(b) to the max, and person further savings successful an IRA and astir nary revolving recognition debt. We presently person $1.8 cardinal successful these savings accounts.

However, astatine 52, we decided to determination to Florida — present that our kids are some grown and connected their ain — alternatively than hold until retirement. We some inactive enactment and unneurotic marque implicit $400,000 a year. We program to enactment until 65 astatine minimum and person ne'er had superior wellness problems.

At issue: We bought a location astatine the precise apical of our desired scope and person a 20-year owe (2.5% interest) with a monthly outgo of implicit $4,100. We person ever paid other connected our mortgages, and my extremity was to bash the aforesaid with this location truthful that by the clip we deed status astatine 65, it is paid off.

However, my woman says we volition person plentifulness of wealth erstwhile we deed status property to support the location outgo for the archetypal 5 to six years of retirement, and that we shouldn’t “penny pinch” present that we person clip to travel, adjacent earlier we afloat retire.

I recognize that we are blessed to person specified a bully nest egg, but I interest that stretching that location outgo into our archetypal 5 years of status volition devour a immense chunk retired of the status funds that could jeopardize longer-term planning. We besides program connected this location being the bulk of the “inheritance” for our 2 children, truthful don’t program connected selling and moving erstwhile we yet marque the status plunge.

Thoughts connected however to attack this owe conundrum?

Two Pharmacists successful Florida

You tin email The Moneyist with immoderate fiscal and ethical questions related to coronavirus astatine, and travel Quentin Fottrell on Twitter.

Dear Pharmacists,

This is simply a win-win. You’re charmed if you do, and you’re charmed if you don’t.

This file often leaves readers flabbergasted. “I can’t judge this brainsick situation!” readers accidental arsenic they effort to process immoderate missive writers’ misdeeds oregon familial shenanigans. “Who would bash thing similar that?” It’s a pleasance to work a missive wherever radical person really done truthful overmuch right. You’re successful a financially unafraid presumption and, successful a worst-case scenario, you could ever downsize from your existent home.

The reply to your dilemma is an highly subjective one. There is an statement to beryllium made that we don’t cognize whether immoderate of america volition beryllium present by the clip our mortgages are paid off, truthful wherefore not fulfill our obligations and bask each that beingness has to offer.

Given the involvement you volition undoubtedly prevention by paying disconnected your owe early, adjacent astatine 2.5% interest, I hold with you. Overpay if you can, particularly aboriginal connected successful the beingness of the indebtedness erstwhile the interest-rate payments are higher.

Depending connected the presumption of your mortgage, you whitethorn beryllium constricted connected the magnitude successful overpayments you tin marque (10% successful immoderate cases), and arsenic frustrating and galling arsenic it seems, determination whitethorn besides beryllium a punishment for overpaying. 

For you and your wife, however, that could make a blessed mediate ground.

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