scubadiver wrote:There's really no right or wrong answers here, this is just what I would do if I were in your situation.
scubadiver wrote:I would do the following:
1) Increase emergency fund to 8 months expenses
2) If you have not already, fully fund IRA (preferably Roth IRA if eligible) for 2010 and 2011 for both you and spouse.
3) Pay off car loans
4) If you still have $$ left at this point, sure take a vacation.
5) If you still have $$ money burning a whole in your pocket, pay down mortgage.
There's really no right or wrong answers here, this is just what I would do if I were in your situation.
shoetrip wrote:You are 61 and you don't have too many years left where u can simply pick up and travel at will without all types of special needs and aids.
Skier65 wrote:Hi all,
We anticipate pensions worth about $85,000 annually in 4years plus social security.
Cloud wrote:IMO a mortgage should absolutely be paid off when one retires. It lowers your income tax because it's "X" amount a year you don't need to withdraw from savings just to pay on the mortgage.
yobria wrote:Agreed. You probably lose the tax write-off due to lower income, and its one less expense for which you must generate taxable income.
Ron wrote:yobria wrote:Agreed. You probably lose the tax write-off due to lower income, and its one less expense for which you must generate taxable income.
You bring up a point that I didn't understand till I actually retired, and need to manage my own taxes (rather than my former employers, via a payroll deduction).
Now, every expense is looked at as "x + 15%". What I have to pay, plus what I must pay in taxes to get any item, since the majority of my retirement funds (either in SPIA's, IRA's or future SS income) is in "untaxed" funds. It's a bit different than when you're working and usually determine if you can afford that car payment, based solely on net income.
The other thing about having a note/mortgage (at any age) is that I could never quite understand the desire to pay $2 in interest to get back possibly $1 in taxes. We're at the point of not having any level of deductions that take us above the standard, when we file our federal taxes, and have no problem not having to spend money just to get a portion returned to me.
midareff wrote:I guess there are many alternatives for paying down/off a mortgage or not. In my case I have about 250K left outstanding at 5 3/4 %. Then I look at portfolio returns for the last two years and wonder why I should take money that returned three times that to pay off 5 3/4 %.