itemize or standard deduction?

[Ima saver]

Well, I have had every home paid for since I paid off my first one at age 32. Back then, I knew nothing about investing. It is nice to know that I can trade up in houses every once in a while and still have a paid for house.

[scfr]

I've never heard anyone mention warm fuzzy feelings regarding paying off a mortgage ... did I miss something?

[Aleta]

Ima: That's why you are where you are in life. Most people don't learn these lessons. They are looking for the quick money and not properly planning. You are just great! Thanks for all of your input!

[Ima saver]

And you do get those warm fuzzy feelings. It is nice not to pay out all that interest for all those years.

[miatagirl]

more info

HI Thanks for all the replys. Here is more info.
Both of us are 53. Tax rate 15% Interest rate on house 6.875. Owing 100,000. No Credit card debt, car debt or any other kind of debt. Maxed out Roth IRA's each year. Contributate to Deferred Compensation from work to the max and over 50 extra $$. Husband is retired military so we have a pension every month to help with costs. Last year we got back almost 800. from income tax. I ran it with the same numbers as last year pretending that we took the standard deduction and we would have had to pay 58.00. We are very conservative in spending. Willing to take a little risk in the market. I just want to make the best move for the money. I can sleep easy either way at night, by paying it off or investing it. Thanks for the help.

[miatagirl]

I added more info at the bottom of the replys. Sorry I have only 2 posts to my name and didn't know how to reply ...go figure!!

[MonkeyMama]

With your age AND the interest rate on the home I would have to say I would pay it off.

Then you can invest the money you were paying to the mortgage. Well, put a little away for that $58 income tax bill too. That doesn't sounds bad though. You are certainly not getting a huge benefit for the mortgage deduction, you are paying a lot in interest, and you do not have a terribly long investment horizon so I am going the other way on my answer then.

Good Luck and congrats on the windfall though!

[jmjj215]

Yeah, your benefit for the mortgage deduction is small (at a 15% tax rate). I'd pay it off.

[disneysteve]

With your age AND the interest rate on the home I would have to say I would pay it off.

your benefit for the mortgage deduction is small (at a 15% tax rate). I'd pay it off.

Your after-tax mortgage rate is about 5.84%. That's quite a bit higher than mine (4.4%) which could tilt the scale toward paying off the loan. The deciding factor would need to be what you would be doing with the money if you don't pay off the loan. A well-diversified portfolio could certainly earn a lot more than 5.84%, but it depends on how aggressive you wish to be with that money.

I think paying off the mortgage wouldn't be unreasonable in this situation, but I couldn't say for sure without knowing the big picture of your overall investment situation.

[scfr]

Thanks for the additional info. I tilt towards paying off the mortgage, but you really can't go wrong either way. Enjoy the warm & fuzzy feelings you get from whatever you decide to do!