pay it off or focus on IRA
There's another thread on something similar, but let's continue...
I'm still having trouble getting this issue straight:
By paying off a house, one is safely achieving a decent interest rate (~6%). I'm not sure what happens, exactly, to that interest when one also considers the tax write off of the interest... so perhaps someone cares to offer some info on that.
If a mortgage is paid off, a person can get a lifelong "return" on the investment by living almost rent free (property tax is always there). So in today's money in my location, that equates to ~$875, tax free for the rest of your life (free rent). That number will likely be much higher when you figure that rent will be higher in the future. What kind of investment can do that?... guaranteed? (Do annuities compete with this sort of reasoning?)
The longer you live, the more of a "return" you get for your paid-off house. Is my thinking correct here?
Of course, if you pay off a house and find that you have no liquid assets...that's a problem!
So I suppose I'm asking:
What are the factors to consider when deciding on whether to contibute to an early mortgage payoff or a retirment account given that both will play a role in one's retirement life?
There is always that much discussed emotional benefit of actually owning the place in which you reside. I am somehow reluctant to say I'm a "homeowner" when, in actuality, the bank owns it. It's kinda like the habit of saying "I'm building a house" when the contractor is really doing the building of it!