I would NEVER put my house back on the block having paid off the death-pledge.
I find investing in the stock market to be risky enough as it is (the markets are perfectly capable of diving 40% and staying there, theres no rule saying they WILL go up 7% on average the next 30 years)
The last thing I want to do is make it riskier by investing on margin (even if low interest) and that margin is the roof over me and my families' head.
Having that paid off house means:
1) I need to realize/bring in very little income (either from a regular job pre-FIRE, part time semi-FIRE or truly R post-FIRE) to actually sustain my basic needs, which means I can play legal games to really reduce tax burden. Since the mortgage is gone one can FAFSA hack when the time comes (money 'sheltered' in the form of 100% home equity and nicely sized retirement accounts). One could get really creative if you say had a family of 4 and could live on $40k a year AGI MFJ from a part time work, you'll be in the money for some very subsidized Obamacare and EITC your tax rate might be negative!
2) In Florida especially, the house is a very well protected asset and about the only way it can be taken is if you don't pay the mortgage (none), property tax or the IRS (and its a lot easier to avoid that when you have no IRS tax bill because FIRE type income levels tend to be very low tax burdened, as Go Curry Cracker is somewhat famous for).
3) I only need to invest in tax advantaged buckets and don't really bother with a taxable account which you have to be careful with. A $300,000 windfall would have to go there and now I could DQ myself from a lot of govt cheddar with that (say you accidently get $3601 in dividends... good bye EITC). Im very fortunate to be able to MEGA ROTH backdoor at me current employer so I can FIRE in the timeframe I want investing solely in tax-advantaged spaces. If I ever switched companies the mega roth backdoor option would be required before I jumped ship (imagine asking about THAT during salary negotiations or when your boss asks whats important to keeping you with the company). 5 years seasoning rule that money I backdoor in is just as accessible to me as a taxable account but tax free.
4) if I or the SO drop dead tomorrow a paid off house and enough life insurance + 401k + roth for the surviving spouse to be able to live a decent frugal life as a single parent whose job is to raise the kids FT and not worry about the roof over our head. It doesn't have to be death either... Job loss, illness, need to move... LIFE EVENTS like these happen and "the more you overthink the plumbing the easier it is to stop up the drain".
