Should I "save for retirement" when I have a mortgage?

[Zippyjuan]

As individuals, we will not know if we made the right decisions about saving for retirement and/or paying off our mortages and other debts early until we are actually retired. Then it is too late to change what we did.

 

[tmosley]

Retirement is an odd concept, anyways. I plan to continue working until I die. Retirement is both boring and life-shortening.

I may get to the point where I would only be working a few days a month, but I would still be doing SOMETHING.

 

[brandon]

Retirement is an odd concept, anyways. I plan to continue working until I die. Retirement is both boring and life-shortening.

I may get to the point where I would only be working a few days a month, but I would still be doing SOMETHING.

I hope to spend years 60 onward playing poker, golf, fishing, drinking beer, and popping viagra.

Sounds a lot more fun than the 9 - 5

 

[angelatc]

Let's put stock market, Federal Reserve, commodities and other magic tricks with investment aside.

The main argument I hear about "saving for retirement" is "tax deferred".

But if you're around 30, and retirement is 30 years from today.

Doesn't it make sense to pay off your mortgage first?

You won't see what you saved for your retirement until you retire, and that's about 30 years away.

Would you save more in taxes by saving for retirement? Or paying your mortgage?

Either way, why let somebody manage your money for 30 years when you can get out of mortgage debt a few years early?

It's never a good idea to put all your eggs in one basket. If you can pay off your house in one lump sum, then do it. But if you can't, disaster strikes, and you lose your house, everything is gone.

If you have some in IRAs and/or retirement funds that are protected from most creditors in bankruptcy, you'll not be penniless.

So much of this answer depends on where else you could invest the money. When I was working, my employer gave us the option to buy stock at 15% below the market, which gave me an immediate 15% return (give or take fluctuations in the market.)

Plus there are tax implications.

 

[tmosley]

I hope to spend years 60 onward playing poker, golf, fishing, drinking beer, and popping viagra.

Sounds a lot more fun than the 9 - 5

Without a purpose, you're more likely to waste away and die ten years earlier than you would have otherwise.

Also, there is a false duality here. The choice isn't between working 9-5 and doing nothing productive all day. By then, you should have a lot of savings, so you shouldn't have to work much, and since you've been doing whatever you've been doing for 40+ years, you will probably be the boss.

Hell, I'm 26 and I'm already the boss at my place. I can come in when I want, leave when I want, and take vacations when I want, so long as I get my work done. That is what the "golden years" should be like. Hell, one of my clients is 85 years old, and still comes to me with ideas for new applications for our technology. The guy is a multimillionaire, but he still comes in to work (when he wants to). That is the way it ought to be, and indeed, that's the way it was before FDR came along and introduced the idea of universal retirement.

 

[Optatron]

Retirement is an odd concept, anyways. I plan to continue working until I die. Retirement is both boring and life-shortening.

I may get to the point where I would only be working a few days a month, but I would still be doing SOMETHING.

that's what I wanted to hear

seems people expect retirement that's sitting on your butt all day, waiting to eat, and watching TV.

I do that half the time today!

 

[Optatron]

Yup, I paid mine off this month. It's going to be nice having an extra $500/month. I'm probably going to start construction on a self sustaining house with the extra money.

WOW cool.

I thought you were the guy who keeps complaining you pay 50% of your income and can't get by.

 

[Optatron]

So much of this answer depends on where else you could invest the money. When I was working, my employer gave us the option to buy stock at 15% below the market, which gave me an immediate 15% return (give or take fluctuations in the market.)

Plus there are tax implications.

so you mean you were able to get a 15% discount on stocks you wanted?

which meant you can immediately sell and make about 17.5% profit? (minus fees minus taxes)?