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Avoid a mortgage

By Terry Savage on August 06, 2022 | Financial Planning / Retirement

My wife and I are in our late 60s and want to move into a new home and avoid a mortgage.
We have $2.1M in stocks, bonds, and cash in 2 Roths, 3 IRAs,a 403B, and savings. We would need to pull out $300,000 to do this, leaving us with $1.8M. Our monthly expenses are more than covered with Social Security and 403B pensions. Good move or should we take out a 15-year mortgage?

Terry Says

I surely understand the desire to live mortgage free. And it seems you have enough liquidity and investments to see you through retirement. The only issue is an interest rate vs inflation question. Mortgage rates have now dropped below 5% again — Do you think inflation (or your investment performance) could outpace paying 5% interest? If not, go ahead and tap into your cash (preferably the Roth so there is no tax bill) to buy our new home.
Or maybe this is the time to consult a financial planner who might point out other”holes” in your planning –such as the need for Long Term Care Insurance or an estate plan that you might better spend some money on.



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