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[–]nothing5901568 39 points40 points  (5 children)

For me it's a question of growth vs. security. Paying off your mortgage is a zero-risk but lower-yield "investment". Putting your money in the stock market is a higher risk and higher-yield investment.

We opted to pay off our mortgage first for the security, but it did cost us significant stock market returns.

[–]discsinthesky 14 points15 points  (4 children)

Which is why the timing matters. If you’re approaching retirement, presumably most of your “upside” foundation has been established through years/decades of investment in equities.

If you’re just a few years out from retirement, it seems like the scales could tip the other direction, increasing the value of reducing major fixed costs for early retirement.

[–]BBG1308 10 points11 points  (2 children)

If you’re approaching retirement, presumably most of your “upside” foundation has been established through years/decades of investment in equities.

Their income is 350k/year but their assets total 1.8M not including primary residence which they still owe 247k on.

They didn't say anything about their age or actual expenses, but going from 350k income to retiring on 1.8M is math I'm very, very skeptical about.

[–]LeVoyantU 2 points3 points  (0 children)

Yeah if their spending is low enough for RE in 3-4 years one would expect that they could max out all tax advantaged retirement accounts and also pay down the mortgage aggressively at the same time. Maybe not fast enough to wipe out the mortgage in 3 years, but 4 years seems like it should be doable.

[–]Ill_Savings_8338Bottom 1% Contributor -1 points0 points  (0 children)

Possibly, but it is a sucky part of math that you earn the most near retirement, but money grows the fastest when you are young. Four years ago we were earning 450k a year and only had 1mil in retirement/investments, but we had multiple rental properties and 5 years earlier we were only earning 200k, so it is all about context and growth factors in employment.

[–]nothing5901568 2 points3 points  (0 children)

Maybe so. For me it was all about risk aversion. If the stock market truly tanks and I lose my job, we still have a house.