Age 66 here and by my calculations have enough in taxable investment holdings to pay-off 4.5% mortgage and in social security, a pension and deferred investments to get me through retirement, requiring a steady 1.2% annual return to stay cash positive for the remainder of my days. Am not worried much about inflation as both social security and the pension have COLA adjustments, and I figure I am not exposed to all that comprises inflation.
My current mutual funds based financial advisor says don't do it, just continue to shell out $18K per year in interest and principal payments for the next 23 years. They also sold me an annuity with quarterly fees that have just about eaten away all of three years earnings. If I wait much longer to get out, it will yield less than my original investment after the surrender charge is deducted. My taxable investments with them have out-performed tax deferred investments with them.
A prospective ETF supplying financial advisor says pay off the mortgage and we'll charge you 1.5% (on the monthly total divided by 12) on your investments held by us and we'd only charge you 1.0% on a million dollars or more. So until my holdings with them total >$1M, I'd be paying more in fees that the person who already has $1.2M? I'd be paying roughly $12K per year in fees hoping to realize roughly $8K per year after fees. My age 70.5 IRA/401(k) annual RMD is shaping up to be about $21K, a good portion of which would be re-invested, provided the mortgage is paid off. Heck, I'll even consider scattering CDs all over the place.
I'd like to take more control of this, reducing the fees coverage driven portion of investment risk and it may take some work to free up about $200K of my taxable investments, while keeping capital gains to a mininum, to pay off the mortgage.
Help! This is not fun. Do I need a fiduciary, even for a short period of time?
Thank you