At 58, Everyone Said Keep Your 2.75% Mortgage. At 64, You Paid It Off Anyway

At fifty eight, you owed $164,602 on a 2.75 percent mortgage that would not end until you were eighty three, and every person you trusted told you to keep it. Cheap debt, they said. Invest the difference. This is the story of the six years after that: five months of throwing every spare dollar at the bank, a paystub with two zeros on it, a retired mechanic on a bench who said one sentence about a jar that never refills, and a savings account with one word for a name. What nobody saw coming was not the interest rate. It was what happens to a payment after the last paycheck. To keep $759 for the bank, a retiree pulling from a 401(k) has to take out more than $759, and the jar runs dry years sooner. So you kept the match, kept paying on time, put $1,900 a month into an account called HOUSE, and on your last shift you wrote one check. And your coworker who kept his 2.75 percent loan? He was right too, for his own reasons. What is one payment in your life right now that you refuse to carry past your last paycheck? Tell me in the comments. This is a fictional story used to illustrate ordinary money arithmetic. It is not financial, investment, tax or legal advice. The people, the employer, the credit union and every dollar figure are illustrative and hypothetical. The mortgage figures assume a fixed 2.75 percent 30-year loan; the savings account assumes about 4 percent; retirement account projections assume about 5 percent a year and roughly 15 percent in taxes on withdrawals. Real interest rates, investment returns and tax rules vary and can change. Consult a qualified financial professional about your own situation. 0:00 The payoff letter 0:47 Two point seven five 1:31 Your name goes on this 2:17 Twenty-seven years on buses 3:06 When does that thing end 3:34 How the clock started over 4:15 Never pay off cheap debt 5:20 The stubborn fix 5:59 Two zeros on the paystub 7:01 Vern's sentence 7:37 A jar that never refills 7:55 Life after the last paycheck 8:57 The tax nobody mentioned 9:24 Dry at 87 10:09 When do you want it gone by 10:57 Inside the walls 11:25 An account named HOUSE 12:05 Keeping the mortgage after all 12:45 The first test 13:56 The folder man 14:15 Two in the morning 15:05 We would be all right 15:25 The list 15:55 Six weeks without a paycheck 17:06 The boat 17:48 The dock 18:08 Two checks 18:52 Huh 19:09 Paid in full 19:32 At 67 20:10 Curtis was right too 21:02 Two dates at once 21:33 64 #payoffmortgage #mortgagefree #retirement #retirementplanning #401k #debtfree #mortgage #paidoffhouse #retireearly #personalfinance #moneystory #ininfinance #debtafter50 #lowinterestmortgage #financialfreedom