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Under 5 year Mortgage payoff – Savings??

Home Mortgages and Home Buying Under 5 year Mortgage payoff – Savings??

  • Avatar Eye3md 
    Participant
    Status: Physician
    Posts: 69
    Joined: 12/01/2017
    Splash Refinancing Bonus

    @eye3md ,
    “Someone else asked, “what will you do when you pay off the mortgage?” Good question! For me, it would be about freedom.”

    “I make a huge income, so I can fund retirement, pay for a big dumb house, and take great vacations. The future may not allow this.”

    Ones definition of FI seems to change when it comes to shifting life priorities. Why jump out of a perfectly good plane with a big dumb house that’s paid for? No recommendation intended. RE (retire early or not) has anxieties and strategies and choices as well.
    Good luck with your journey as well.

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    Very true.

     

    I think part part of it is the thought of moving to a western state to enjoy skiing more than I do now. With my current home, I feel like I can’t do that. If the home was sold, or paid off, I could become the ski bum I’ve always dreamed of 🙂

    #212436 Reply
    Liked by Tim
    Avatar HealthyDoc 
    Participant
    Status: Physician
    Posts: 17
    Joined: 03/17/2019
    When you say “maxing out retirement”, that doesn’t really give alot of information. Are you at $80-$140k per year? Do not think you have completely paid yourself yet. $400 20.00% $80 35.00% $140

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    Thank you for the post.  Are you saying that I can put $140k into retirement?  Can you please share more details?

    I max out the $55k i401k

    Plus $5.5k Roth

    Plus $3.5k HSA

    I thought that’s me maxing out.  As private practice doc, I also get some tax breaks around my home, business expenses, etc.  But is there something I’m missing as a huge retirement tax savings to get up to $140k?

    #212447 Reply
    Avatar HealthyDoc 
    Participant
    Status: Physician
    Posts: 17
    Joined: 03/17/2019
    “what will you do when you pay off the mortgage?”  Good question!  For me, it would be about freedom.

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    Absolutely!! It’s all about freedom for me – Having options is a beautiful thing!  Debt-free means freedom to work as I choose and have time for everything else I love (travel, cycling, spending time w/ family, hiking, learning new languages, exercising, reading for fun, developing friendships, volunteering, sitting and relaxing … Life is short 🙂

    #212452 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3032
    Joined: 09/18/2018

    Retirement savings may or may not involve tax advantage vehicles. Your total retirement nest egg will need more than the IRS breaks. You probably need to hit at least 20% of gross income. Of course, use every bit of tax advantages but shoot for the amount you desire.
    The savings rate will impact your wealth more than anything. Don’t let IRS rules determine your retirement targets.
    https://www.physicianonfire.com/a-tale-of-4-physicians-the-importance-of-lifestyle/

    #212477 Reply
    Avatar Financial Naive MD 
    Participant
    Status: Physician
    Posts: 30
    Joined: 05/05/2019

    Congratulations for your student loan payment.  However, I believe some debts are good.  In your situation, home mortgage is a good debt to me.  If you can pay 7k monthly and still have 15k saving, I would not worry about mortgage debt.  I would put 17k saving to maximize all tax benefit accounts (including HSA and kid 529) and the rest go to taxable low cost index funds. About 3-4 years before your ARM starts, if you can’t refinance, then you can work on paying off the mortgage.  You can be very conservative and pay off the mortgage now, but you probably will have to work longer before your FIRE.

    #212544 Reply
    Liked by HealthyDoc, Zaphod

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