cliff wrote:I am retired and have been using the tried-and-true 4% limit on withdrawals. I have a mortgage and have been counting principal payments against the 4%. However, in reality this is just a different asset. It is not unlike buying gold, artwork, or for that matter a mutual fund. Should I really count principal payment against a 4% withdrawal?
I also own a condominium and the same issue applies. My thinking is that the principal on my main residence should count against the 4% but not on the condo. My reasoning is that for my primary residence the principal is not unlike rent as a living expense although it does not change my net worth. The condo on the other hand in essence becomes an investment.
cliff wrote:YDNAL wrote:.... I don't understand the reason to have mortgage debt (read: added expense in the form of Interest) while also withdrawing from a portfolio... different strokes and all.
The reason to have mortgage debt is because of the low rates and tax deduction of mortgage interest. With interest at 3% or so and I bonds at 5 plus % for those bought back when they were great should I sell the I bonds to pay the mortgage?
cliff wrote:Please explain to me why selling I Bonds returning 5% plus would make sense to pay a mortgage at 3%? I should add that I always sell equities and bonds to retain the allocation that I desire.
For subject of this thread you wrote:Retirement 4 percent withdrawal - mortgage principal
Users browsing this forum: Google [Bot], Yahoo [Bot] and 41 guests