Ok, we are not going to be paying down our mortgage before retirement. We have a 15 yr at fixed 2.875% and about 13 years to go. I really would love to pay it off but every one of my calculations show we would be more financially ahead if we just work the amortization table, so we are going to listen to our heads, not our hearts. I take comfort in knowing that if we were to sell a few investments today, we could pay the thing off tomorrow, so that keeps me warm at night.
For those that are in the same boat and not paying it off prior to retirement, do you just mentally set aside your unpaid principal balance to use to pay down mortgage? So for example, I read Mr. 1500 on his blog said he wanted to hit his expenses plus an additional amount for his unpaid principal balance.
In our case, if our expenses (excluding mortgage) are $30k per year. Our investable assets are $759k today (so we exceeded that $30K at 4% swr). Our mortgage is ~$1500 (just principle and interest, we do not escrow), so $18k per year. Unpaid principle balance is $199k today. Pretty certain this is our forvever house. We love it to pieces and love our neighborhood, school district, and town.
Would you just keep saving to cover the $199k (or will be $175K by the time my husband realistically quits with about 11-12 years to go) or do a function of $18k annual payment times 20/ 25 (4-5% swr)? Keep it in cash? In index fund?
We keep very little cash now (may change once retirement is imminent) and in VTI/VTSAX pretty heavily.
How are you planning for your mortgage payment, especially on a "short" horizon of under 15 years? Thanks!