Retirement Planning
Hi Terry, I plan to retire in May 2027 at age 67. I owe $115,000 on my primary mortgage which is 3% for next 25 years. I feel I should pay off the mortgage before my retirement. I would use $65,000 of funds from my IRA and $50,000 of cash from a 4% Schwab SWVXX savings account. I feel like I should lock in some gains from previous up market earnings to pay down and own my home before going to fixed income retirement. Current retirement balance in IRA is $2Mil. Is this a good retirement planning strategy?
Terry Says
This is a TERRIBLE idea! Do NOT pay off your mortgage with a rate of 3%. It’s like getting “free” money!
Instead readjust your assets if you want to lock in some gains. That is, sell some stock funds and move the money to a MM fund INSIDE your IRA. Then use the interest you earn — should be about 4% — to pay your monthly mortgage!
