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How old were you when you paid off your home?

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    How old were you when you paid off your home?

    I started another thread asking about how much do you put towards retirement and when is it enough. I thought hard about why I was asking the question and I think ultimately it comes down the fact that I'd like to be debt free but at the same time I don't want to neglect retirement. As of right now we'll own our rental home when I'm 47 and home when I'm 49. Those are our only two debts so I'd love to get rid of them even quicker but I don't want to neglect our retirement in the process. Just wondering if debt payoff was a priority for you all or since I'm sure you've all secured low loan rates do you feel more comfortable keeping the loans for longer to prioritize college for children/savings/retirement? As of right now I feel like we're very middle ground on both approaches and should possibly be more focused.

    #2
    We paid off our home last August so I was just turning 55. We had always made at least small extra payments, like rounding up our payment to the next $100. When we were able, we made larger extra payments. Once our daughter finished college in May 2018, I started paying a lot extra and finished last August (July actually as our final payment was taken out of our escrow account). Since then, the money that was going to the regular payment and the extra payments has all been added to our monthly savings which has been very nice.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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      #3
      Pretty close to 45.
      Getting the house paid for was a major life milestone and frees up lots of money for other things. We've not had a mortgage for 15 years.

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        #4
        I was 45. My husband was 51. Best feeling in the world!

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          #5
          We were around 40/41.
          We focused more on tightening the budget and increasing income than on cutting retirement savings to get the mortgage paid off, but I did delay starting a SEP IRA for a little business I owned while we were in aggressive paydown mode, so I guess that means I did defer retirement savings a bit (DH continued to contribute as much as allowed to his self-employed retirement plan). Trying to remember that far back (not easy), but I don't think I even started thinking about starting the SEP IRA until after the house was paid off and I started asking myself "What next?"

          For us personally, owning a paid-off home brought a lot of peace of mind. And as Fishingdude77 already said, not having a mortgage frees up money for other things, like retirement savings.

          Nothing wrong with the middle ground approach your taking. It's like trying to choose between two really reliable cars. There isn't really a right or wrong answer, just deciding which is the best fit for you.

          Do you feel that your focus and energy would increase, hopefully resulting in an improved overall financial result down the road, if you choose to focus primarily on just one thing?

          One thing you may want to factor in is the limits to retirement savings. If your mortgage was paid off and you put the principal+interest towards retirement savings, would that push you over the limit allowed?

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            #6
            We paid off our rental house in 2018 (I think), so 32 y/o (DW: 33). We're working to buy our next house this/next month in cash (sounds like our latest offer from last night may be getting accepted! woohoo!), so we'll have our home paid off at 34/35 y/o.

            That said, as you highlight, being debt free is really important for me/us. Honestly, DW is more comfortable with debt but wants to minimize debt as feasible... While I've basically become allergic to it, and it just makes me nervous/angst-y to owe people money, not to mention having a chunk of my paycheck allocated to somebody else's wallet. That said, I/we definitely used debt to get started... Car loans, personal loans, DW's student loans, mortgages on our first couple houses.... but as I've grown my assets, I've come to see less and less reason to let banks dip into my pocket. I'd much rather earn interest than pay it. I know that I'm not leveraging my money to earn higher potential cash-flows, but all of our cash flow is OURS, and ours alone. Plus, there's far less risk involved -- a bank can't decide to call your loan, or if you lose an income source you won't get in a pinch with monthly payments.

            Another factor to consider is a sort of "net worth asset allocation" ... with this next home, we'll have a total of ~$500k in real estate, ~$500k in retirement, and maybe another $100k between cash, 529s, taxable investments, etc. I'm not a huge fan of being so RE heavy without much liquidity, but we decided that this just seems like a great opportunity to pull the trigger to be finally be 100% debt free, hopefully forever. Plus, without any loan payments, we'll be able to save/invest literally over 50% of our already healthy income, so the liquidity will build up again pretty fast, and we'll be able to start funding our taxable investments & in-cash rental properties without a care in the world. 529s (plus UTMA investments) are already on track as well.

            All of that said... these were OUR goals, OUR choices, OUR priorities, OUR motivations/thought processes. When you're talking about paying off your home, these are big dollar figures...so you always need to evaluate your own situation & priorities, and build/follow the plan that will work best to achieve your personal goals. Getting perspectives/opinions from other folks like us, family, friends, etc. can be valuable -- but in the end, it's got to be your call.
            Originally posted by scfr View Post
            Nothing wrong with the middle ground approach your taking. It's like trying to choose between two really reliable cars. There isn't really a right or wrong answer, just deciding which is the best fit for you.
            ETA: Totally agree with scfr, and sorta what I was going for in my last section. There's no wrong answer, only what's right for you.
            "Praestantia per minutus" ... "Acta non verba"

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              #7
              Still paying.
              Brian

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                #8
                Still paying.
                james.c.hendrickson@gmail.com
                202.468.6043

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                  #9
                  39 Years old paid off house.

                  but moved 2 years later and have a mortgage

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                    #10
                    still paying forever. No seriously I think for us we have no plans on paying off the mortgage until the day we retire. That will likely be the day we pull the trigger. It's just one of those things that doesn't make sense. Without mortgage we'd still be out at least $1200/month property taxes. So I see us as more of people who are trying to leverage our cash to increase it as soon as possible. To keep on saving. Sometimes I do mull over pulling the trigger on being debt free but then reality sets in and I say it'd still take us 5 years to finish our house. That's not the end of the world but I"m hoping to do something more productive with our money. Sometimes I wish we lived somewhere reasonable that paying off our mortgage was a more realistic thing. I mean when i look at our cash at $200k and then think that's barely a down payment it's hard to swallow paying off the house. but at the time it's enforced savings plan.
                    LivingAlmostLarge Blog

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                      #11
                      Paid it off at 33

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                        #12
                        I think it depends a lot on what your goals are. Rates are very low so financially it definitely makes sense to priorities those other savings goals before paying off the mortgage. For me personally, I hope to quit my corporate job when DD graduates so I'm on target to pay off my rentals that same year (2027) to increase cash flow to coincide with my loss of income from my day job. I'll be 41. My primary won't be paid - just bought in August and have a 20 year loan. When I leave my corporate role, I'll sell the house so I'm not prioritizing paydown on that loan, just minimizing the interest paid and maximizing equity gained for the next 7 years by being on a shorter term.
                        Last edited by riverwed070707; 06-12-2020, 10:16 AM.

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                          #13
                          Originally posted by kork13 View Post
                          We paid off our rental house in 2018 (I think), so 32 y/o (DW: 33). We're working to buy our next house this/next month in cash (sounds like our latest offer from last night may be getting accepted! woohoo!), so we'll have our home paid off at 34/35 y/o.
                          UPDATE: We just got back the signed acceptance of our cash offer, which was 5% below asking too!! So as long as no bumps with inspections & such, we'll be debt-free homeowners as of 8 July 20 -- a slightly-late Independence Day victory for us!!!!!

                          (which reminds me as well that it was roughly Independence Day last year that we cross the $1M mark for our net worth too! Happy days!!!)
                          "Praestantia per minutus" ... "Acta non verba"

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                            #14
                            Originally posted by kork13 View Post
                            UPDATE: We just got back the signed acceptance of our cash offer, which was 5% below asking too!! So as long as no bumps with inspections & such, we'll be debt-free homeowners as of 8 July 20 -- a slightly-late Independence Day victory for us!!!!!

                            (which reminds me as well that it was roughly Independence Day last year that we cross the $1M mark for our net worth too! Happy days!!!)
                            Congratulations! Hope things go well for you moving forward with the home purchase.

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                              #15
                              4 years ago when I was 50. Wanted to have it paid off when oldest started college, but we didn't make that goal. We paid it off when she was in her 2nd year of college and middle kid was starting college.

                              We had a 30 year loan that we paid off in 22 years. I took our house payment/12 and paid that extra towards the principle every month. It shaved 8 years off the loan. That's about all we could afford to do at the time.

                              Love being debt free, its a whole new world!

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