growth • In peak earning years, you might balance growth with some debt reduction • Approaching retirement, you might lean toward lower fixed expenses and more predictability Some retirees feel enormous relief after paying off their mortgage. Others are comfortable carrying a small fixed rate mortgage if it allows them to keep more assets invested. There is no universally correct answer. There is only the answer that best fits your risk tolerance, health, income stability, and long-term plan. Your financial advisor can help you find the correct answer for your specific situation.
A Simple Approach: Cash, Mortgage, Or “Hybrid”
If you are seriously weighing whether to pay cash, ask yourself three big questions: 1. After paying cash, how much would I have left in li ft in liquid savings and investments. If the answer is “not much,” that is a concern. 2. What guaranteed benefit do I get from avoiding interest vs what potential benefit might I get from investing instead. Comparing the mortgage rate to your realistic expected returns (after tax and after fees) is a useful conversation to have with an advisor. 3. How will this decision affect my stress level. Numbers matter, but so does sleep.
In reality, many people choose a “hybrid” route:
• They put a strong down payment on the new home
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