I retired early at age 55. I didn't plan on it, I lost a job and really didn't want another one. I thought I had about half the assets I needed to retire, but it worked out OK. I stayed retired for nearly 5 years then a former coworker, who contacted me about potential jobs from time to time, convinced me to join his company in a work from home/minimal travel job, which is ideal for my situation.

My mortgage is at 2.625%. I refinanced from 4.25% during covid when the rates dropped through the floor. If I take money out of my IRA to pay it off, I will pay a 29%(state and fed) tax rate on that. I will not be paying it off early unless insurance rates go high enough to change my mind. If I pay off the mortgage I could drop wind coverage.

In my second year of retirement, I had to put a new roof on the house. If could have paid cash by withdrawing some of my Roth contributions, but I didn't want to do that. So I financed a new roof at 12.99%. I intended to pay it off from the Roth when I turned 59.5. I decided against it. I could easily pay off the roof by withdrawing from one of my rollovers, but I would pay 29% in taxes instead of 12.99%. I could take it out of the Roth and then convert from the IRA's, but that is really the same math.

For peace of mind, I keep enough money in my IRA's in safer money market and fixed income investments to meet total living expenses for about five years. If I keep working during that time, I won't need it. If I suddenly have to retire again, SS will be available next year, but I want to wait until I am 67 because my benefit will be enough at that age to meet by basic month to month living expenses in today's dollars. That isn't the best math, but it's another form of peace of mind.

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Posted by Craft

Member since Oct 2019

1226 posts

Posted on 3/1/26 at 2:33 pm to CharlesUFarley

quote:
If I pay off the mortgage I could drop wind coverage.

This is often overlooked, this is massive savings and insurance deductibles are ridiculously high only covering a total loss.

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Posted by JacieNY

Member since Jul 2024

2043 posts

Posted on 3/2/26 at 6:28 pm to Everyday Is Saturday

I had low interest rates for all of the 30+ years I paid on my home, refinanced twice to use the equity and lower the rate both times. Now with me and the wife retired we just this month paid it off. Part of this was driven by the news of insurance companies pulling out from some states and the hassles we've gone round with them over things they required of us for the privilege of doing business with them.

Though we will continue to insure the house by not owing on it we are in the position where if push comes to shove we would not be forced to have coverage.

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