However,** it's not correct to include this needed income as an ongoing, permanent expense related to the 4% rule. Because your mortgage does have an end date,** as opposed to ongoing living expenses.

I was just thinking about the mortgage end date this morning, and realized that my math above was wrong:

If you have a mortgage each month of $1,500 you'd need an extra $450,000 in your portfolio to cover your mortgage payment.

Instead, the math would look more like this for my situation:

**Mortgage Principal Remaining at FIRE:** $200,000

**Years remaining on mortgage:** 16

**Mortgage Payment per month: ** ~$1600

So if I had $200,000 in my portfolio at FIRE dedicated to just my mortgage, I could draw down that amount of my portfolio to $0 since, as you said, it has an end date. So the math would look something like:

$200,000 - $19,200 mortgage payment per year = $180,800

$180,800 x 7% returns = $12,656 returns -> New Total of $193,456

So in the above example, while the portfolio would decrease over time, if I had $200,000 dedicated to paying off my mortgage, I'd be nowhere near using it all up due to continued investment gains. So in effect, I should be able to pay off my mortgage with

*less* initial investment on my part, as long as I keep the cash invested.

Using this calculator:

https://www.bankrate.com/calculators/savings/savings-withdrawal-calculator-tool.aspx it appears that in the above example, I'd end with ~$35,000 remaining in portfolio.

Taking it one step further, if I use this process, investing the planned principal payments in index funds (instead of paying on the principal) all the way to FIRE and stretching my mortgage out, to its final end date I'd have ~$177,000 more in my portfolio at the end of my mortgage. This means that either I'll have way more money than I'll need, or I could potentially move my FIRE date up significantly. Yay!

Think I'm finally starting to understand it. Can't believe this process/thinking isn't outlined start-to-finish anywhere ;) Simply saying that the interest rates on mortgages are lower than the market rate of return isn't explanatory enough for a newbie like me.