Ask Terry Questions Home payoff or savings account

Home payoff or savings account

By Terry Savage on December 17, 2017 | Credit/Debt

Hi Terry, My husband is 69 and retired. He receives a small pension (enough to cover our mortgage) and about $1,300 in social security. I am 61 and plan to work full time until 65 and then part time until I take social security at 70. I am fully funding my Roth and am putting some money in a 403b. We owe $104,000 on our home, which is not an age in place home. It may be too expensive to retire here in Denver and we will probably sell our home and move somewhere else in 5-6 years. We have 24 years to pay on our mortgage at 3.85% interest. We have about $150/month that we can either put in savings or put toward our mortgage. What would you suggest? Thanks for your insightful columns and advice. Best, Carol

Terry Says

That's a tough one.   If your money is in savings it will likely earn less than 1 percent.  But if you pay more on your mortgage it won't make much of a dent.  And that interest rate is pretty low.   My thought is that especially since you might want to move in retirement, you'd be better off having a savings cushion for emergencies.  Just don't get careless and spend it!



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