House mortgages in retirement

**disneysteve** · 08-23-2015, 11:30 AM

Originally posted by val1714 View Post

I am retired and my wife is still working. I receive a pension and social security. We have 2 homes, one primary and one vacation. The vacation home is under value due to the market being down. We bothe have just enough in our retirement accounts to pay off a majority of the debt.
We have other debt (medical, car loans and misc expenses).
Wondering what people think in regards to paying off both mortgages with IRA funds?

Welcome!

List your monthly income.
List each debt with the balance, monthly payment, and interest rate.
What are your monthly expenses including current debt payments?
How much longer will your wife be working? When she retires, how will that affect your income?

You really need to look at all of those details in order to answer your question.

**disneysteve** · 08-23-2015, 07:01 PM

The other important detail is how much you have in savings. You need to be sure that you leave yourself enough to generate sufficient income for the rest of your life.

**Fishindude77** · 08-24-2015, 04:58 AM

My view is that you should not be carrying debt in retirement, you should be working off the savings you have accumulated. Still having a mortgage and an auto loans suggests to me that you a bit over your head.

I would give serious thought to selling one of the homes, get all debt paid off, then adjusting your budget to live without ever borrowing again.

**disneysteve** · 08-24-2015, 05:06 AM

Originally posted by Fishindude77 View Post

I would give serious thought to selling one of the homes, get all debt paid off, then adjusting your budget to live without ever borrowing again.

I don't think you can say that without knowing the numbers. What if they have a huge nest egg? Some people take loans despite having more than enough in savings to have paid cash. If this couple can afford to pay off the debts and still have sufficient income to cover expenses, there's no reason to sell. We just don't know without more information.

**Fishindude77** · 08-24-2015, 05:47 AM

You are correct Steve, we don't have all of the information.
I immediately see "red flags" when someone of retirement age still has car payments.

**disneysteve** · 08-24-2015, 06:19 AM

Originally posted by Fishindude77 View Post

I immediately see "red flags" when someone of retirement age still has car payments.

Yes and no. For many, it's a cash flow issue. Somebody may not have access to 15K or 20K all at once, but they get a monthly check that nicely covers their expenses including a car payment. So they take a loan even though on paper they have enough to buy the car outright.

House mortgages in retirement