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Thursday, January 9, 2014

7 reasons NOT to payoff your mortgage before you retire

During an application meeting with my clients, whether they are close to retirement or not, I get to a spot where I talk about the conventional wisdom (we hear our parents and grandparents voices in our heads) of paying our mortgage off early. 

In a low interest rate environment I don't advise my clients to prepay their mortgage if:
  1. They have credit card, car payment or other debt which has a higher interest rate than their mortgage, or if
  2. They have not maxed out their employer matching on their 401k or are not fully contributing to an IRA or Roth IRA.
The article goes on to talk about other reasons that you shouldn't payoff your mortgage:
Forbes Article: 7 reasons not to payoff your mortgage before you retire