Pay down mortgage or save for retirement?

Quote:

---

Originally Posted by pinkytoe

. .. Seems to me like a society that really valued educated citizens would make low cost education a top priority. .

---

+1 See Germany.

Quote:

---

Originally Posted by pinkytoe

DD did not take on college loans until she was in grad school. Even with merit-based scholarships, she still amassed quite a bit of loan debt to get through the two years. This was seven years ago and my recollection was that the media pumped out the message non-stop that college loans were "good" loans and that one couldn't make it in the world without an advanced degree. Now, seven years later, she like so many others moans about her indentured servitude to obtain the education needed to achieve her career goals. Seems to me like a society that really valued educated citizens would make low cost education a top priority. There was a time when education at a state university was ridiculously cheap. I don't know about other state universities but ours is rich beyond belief due to oil, gas and real estate interests yet tuition goes up every year...along with student loan debt.

---

Back then as now, I resist "media messages" about consumption. If others do not that, it's on them. I wish that state universities would not build the giant rec complexes and etc. Ridiculous. I would value a University education with well known and respected profs without the silly bells and whistles. It's time that the public stands up and says "no f**king more."

Wash Univ OTOH can charge whatever they like as a private Univ with cache'. My frenemy The Garden Diva has a MSW degree from there and is very well known as a sex therapist. She worked with Masters and Johnson and is a consultant on the teevee show. I know 2+ people who have followed her lead but they are not employable (one is just nuts) although they are in the trendy field of sex trafficking, traffickers, and trafficked.

Quote:

---

Originally Posted by redfox

My DH & I are discussing which will give us a better return. I'd love your input. We really need to see a financial planner, but I want to hear what hive mind here thinks!

I am almost 59 with no retirement fund (I cashed out what I had to pay for cancer treatment last year & have put a few hundred back in since returning to work full time in October). He is almost 45 with a few thousand in retirement.

We have 25 years left on our mortgage, and it is at 265K, 5.3% interest. We currently pay 2K/mo on it, and could potentially go up to 3K with some difficulty, but doable. That would get us to payoff in around 11 years. I can imagine working till I am 70.

It it is possible that I may inherit around 100K in the next 15 years, but I am not counting on it, given the markets & the medical needs of my parents. That would go into my existing TIAA-CREF retirement fund. I also have huge student loan debt, 100K, that I am slowly paying off, but I doubt I ever will totally. There's a 10 year payoff program for those of us in the nonprofit sector, which I am investigating. Essentially, one pays 120 sequential payments, then the balance is written off. Unfortunately, given our gross income, the payments required may preclude our ability to pay down the mortgage or save anything. The Gov't can take up to 15% out of my SS to pay for unpaid student loans, which might be cheaper for me in the long run.

Our only other debt is about 6K on a CC at 9%, a 5K car loan at 3%, both being paid down aggressively, and 7K in medical debt at 0% as well as a decent payment plan. Our current gross income is 107K.

What are the questions we need to be asking, and the pay offs we need to be investigating, in order of importance?

Thanks!
RF

---

I haven't read the other posts yet so sorry if I'm repeating. But I would try to get rid of the house. Clearing that huge long term debt would give you much greater flexibility now and in the future - and certainly more available moolah to put towards debt and savings each month. I'd look at renting a small apt at half the cost of your current mortgage - and it would probably be much more than half the cost of the house once you figured out your "real costs" associated with owning the house - taxes, insurance, maintenance, repairs, extra utilities, etc.. Then I'd work on paying off everything else and starting to save a nest egg for both emergency funds and retirement funds. You have what to me is a very high gross income and once the albatross of a big house debt and other debts are out of the way, you should be able to save like the dickens.

However, if you want to hang onto the house, then I'd first add up ALL the costs associated with owning the place to get the true annual costs involved. Then decide if keeping the house is of enough value to you that you'd want to keep it even though it might mean you and the hubs would have to work many years longer, and sacrifice many more things and perhaps go without any savings in your old age, in order to keep the house now. If you still want to keep the house then I would try to maximize my and DH's income by getting second jobs, and really reduce all my expenses to the bare bones and pay off all non-house debt first then start saving. I probably wouldn't pay extra towards wither the house or the student loan until my other debts were paid off, then I'd make sure I'd have an emergency fund and a bit going to a retirement fund. Then, if I had extra money left over, I'd start to pay extra towards the house and student loans. I'd only pay extra on the student loan debt and mortgage if they were constantly being adjusted upwards. If that was the case I'd probably pay them first - unless, as you said, the student loans may be discharged at some future point or I planned to sell the house at some future point. I'd also look into getting a roommate or 2. Both my Mom, and then myself, did that when we each got divorced in order to have extra money to cover our housing costs. I got 2 roommates and the income I got from them allowed me to pasy extra towards my mortage each month until I paid it off. Then I used that roommate money to put towards savings until I had built up a sizable fund. Then I booted them out as I didn't need their income anymore :-)! I'd do that if you want to keep the digs and also pay extra towards your debt or savings..

Quote:

---

I resist "media messages" about consumption. If others do not that, it's on them.

---

Me too. But that generation (milennials?) are all about media and doing what their peers do. She had attended a specialty magnet high school and all of her friends were lock step about getting advanced degrees. And Wash U was VERY expensive after attending state u for undergrad. But it was important to her to attend a highly rated school in her program.

Redfox-
What could you sell your house for?

Rents in Seattle are high and going up. There is no rent control. I can't imagine having roommates; I could hardly imagine it when I was 18. The very last thing I'd do is give up my house, personally, unless there was a cheaper, nicer one waiting in the wings.

Quote:

---

Originally Posted by redfox

We could currently sell for about $30,000 more than we owe. Selling our home is not on the list.

---

I don't mean this to sound snarky. But. If selling your "home*" is not an option, you aren't serious about getting out of debt. Just sayin'

So perhaps you are entirely right that selling the dwelling in which you reside will not net savings. But I would look to what super frugal girl Spartana says and she is suggesting that a realistic review of your housing costs will show that you can in fact rent cheaper. She has always lived in an expensive part of the country, as do you.

I would also suggest that when you retire on SS income, living in Seattle will not be an option. Too expensive.


* home is a realtortm consumer driven emo word to evoke feelings that drive humans into non-rational decisions. I live in in a house. You live in a house. It's a damn dwelling made of sticks and brick. If you wish to ascribe warm fuzzy descriptions to it, that's fine, but never forget what that costs you in real money.

It's so easy to make assumptions about others' choices. Your values about your "house" are yours, not mine. Your judgements about my intentions getting out of debt reflect the way you choose to live, and that's it.

There have been some interesting suggests made here, and then there has some disrespectful nastiness. I'm done sharing my financial details with this group.

Quote:

---

Originally Posted by iris lily

* home is a realtortm consumer driven emo word to evoke feelings that drive humans into non-rational decisions. I live in in a house. You live in a house. It's a damn dwelling made of sticks and brick. If you wish to ascribe warm fuzzy descriptions to it, that's fine, but never forget what that costs you in real money.

---

IL, I just had that conversation with DIL. A house is just a house, as Burt Bacharach said, or something along the lines of a house is a house and a home is the people inside (grossly paraphrased)

Emotion is chaining me (or I should say DH) to our house. I know unequivocally that I should sell both my house and BIL's house in which we have 50% interest. I would sell both, rent for a couple of years and save up money for a smaller house in a less expensive area. I mean, it just makes sense.

I do prize the memories I have of raising my children there, and those memories are handcuffing DH's emotions to the house (my handcuffs are more the chinese handcuff type--I'm still attached, but feel I can escape my cuffs much more easily), and he refuses to entertain even a discussion of moving. I'm in Burlington VT right now, and would love to take him on a home tour just to get him thinking that JUST MAYBE there are other places he could be happy living in.

redfox, I'm sorry you felt attacked by nastiness.. we all do have strong opinions on these boards, that's for sure. I personally totally understand your predicament. The right answer is yours alone and only you will be able to discern the right direction when the time comes.

Quote:

---

Originally Posted by catherine

I'm in Burlington VT right now, and would love to take him on a home tour just to get him thinking that JUST MAYBE there are other places he could be happy living in.

---

Catherine, check this one out:
http://www.realestateinvt.com/proper...-Road/18411365

I like the fireplace. The taxes are 4200 a year, though. Don't know how that compares with your current place. On the other hand, it is glorious Vermont (got my masters in VT).