Regarding the bolded part: I think you misread a lot of what I posted. 1966 was probably one of the few years where it made sense (in retrospect) to pay off the entirety of your mortgage loan even at 30 years duration (though I'm not positive on mortgage interest rates (I can't locate great data going back that far), they seem by correlation to 10-year treasuries to be above the calculated breakeven point of 6%). Inflation doesn't matter, because stocks do not correlate well with inflation (in fact there's been a negative correlation with really high interest rates, increasing sequence of return risks).
I think you are misunderstanding what I wrote:
And in this discussion we're talking long term, low interest mortgages, blah, blah, blah.
About the last 50 times I wrote out that caveat I'd say "today's low interest rates" but I realized that makes the advice dated. So let me fix that. I mean about 4%-ish on a 30-year fixed. I'm
not talking about the possibility that DPOTM works in all cases and all scenarios. BTW, I didn't see anyone voice any basic disagreement to your premise, including me.
Anyway in the 1966 scenario, as I stated, I was talking about withdrawals, not accumulation like you used in your examples. I've fiddled with this extensively in cFIRESIM and what you find is that because you start with a higher portfolio value, and the mortgage payment is fixed (sometimes people forget to check the "fixed" box), the portfolio value success improves. That's just what happens. When I was looking at it, I was assuming I was partway into a 30-year fixed, and the decision would be to payoff the mortgage all at once with some long-ish period remaining on the mortgage vs. hold the mortgage in retirement. That's a pretty real world decision for a lot of people.
There is a guy named Mike Golio who wrote a book on the topic of retirement. He's been pretty active on the Internet over the years, and he came with an elegant way to frame this issue (paraphrasing and going from memory). I mention this because he came up with this illustration: If someone offered a 30-year loan at zero percent interest, would you take it? The answer is no brainer!
How about 1% Back up the truck!
2% Sure!
3%
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7% This one is starting to get iffy. I'd have to have a clear for the money.
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15% I'd have to be desperate for the money
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25% No way! I'd rather live in my car.
We're pretty close to no brainer!/back up the truck at the moment. If we were at "Desperate!" then mortgage payoff is a different conversation. I've never seen anyone dispute that notion.
Usual caveats which need to be repeated every post:
Of course, it is possible to come up with a scenario where paying off a mortgage makes sense and every has different circumstances, financial situations, etc. etc. etc. And in this discussion we're talking long term, 4%-ish mortgages, blah, blah, blah.