My wife and I have saved up $ 1.8 million and are earning $ 400,000. I want to pay off our 20 year mortgage before we retire. She says no


Dear Quentin,

My wife and I have worked very well in the healthcare industry for the past 25 years. We have always made the most of the 401 (k) and 403 (b) benefits, and we have additional savings in the IRA and almost no revolving debt. There are currently $ 1.8 million in these savings accounts.

However, at 52, we decided to move to Florida – now that our kids have grown up on their own – instead of waiting for retirement. We are both still working and together we make over $ 400,000 a year. We plan to work until at least 65 years of age and have never had any major health problems.

Problem: We bought a home at the very top of the desired range and have a 20-year mortgage (2.5% per annum) with a monthly payment of over $ 4,100. We have always paid extra on our mortgages, and my goal was to do the same with this house so that by the time we retire at 65, it was already paid off.

However, my wife says that we will have a lot of money when we reach retirement age to keep paying for the house during the first five to six years of retirement, and that we should not “buy up pennies” now that we have time on travel, even before we fully retire.

I know we’re lucky to have such a beautiful nest, but I’m worried that stretching home payments into the first five years of retirement will eat up a huge chunk of retirement funds, which could jeopardize long-term planning. We also plan for this home to be a major legacy for our two children, so don’t plan to sell and move once we finally retire.

Thinking about how to approach this mortgage conundrum?

Two pharmacists in Florida

You can email The Moneyist with any financial and ethical questions related to the coronavirus at and subscribe to Quentin Fottrell at Twitter.

Dear pharmacists!

This is a win-win. You are fascinated if you are, and you are fascinated if not.

This column often amazes readers. “I can’t believe this crazy situation!” – say the readers, trying to understand the misconduct or family machinations of the authors of the letters. “Who would do something like this?” It’s nice to read a letter in which people have really done so much right. You are in a financially secure position and, in the worst case scenario, you can always downsize the staff in your current home.

The answer to your dilemma is extremely subjective. It can be argued that we don’t know if any of us will be here by the time the mortgage is paid off, so why not fulfill our obligations and enjoy all that life has to offer.

I agree with you given the interest rate you will undoubtedly save by paying your mortgage ahead of schedule, even at 2.5%. Overpay if you can, especially in the early stages of a loan when interest payments are higher.

Depending on the terms of the mortgage, you may be limited to the amount of overpayment you can make (10% in some cases) and, as frustrating and frustrating as it may seem, there may also be a fine for the overpayment.

However, for you and your wife, it can create a middle ground.

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