Should you pay off your mortgage?

[Jimmy Hong]

Hi guys and gals,

Just an interesting read I ran into. Thought I share...

http://www.marketwatch.com/story/should-you-pay-off-your-mortgage-2013-08-14?link=MW_popular

[Sharon Tzib]

"The bottom line, at least for Mitchell however, is this: “I’d say do both—and keep working longer.”

OMG! This article is so bad in so many ways I don't even know where to begin. First of all, most people nearing retirement age do not have enough money to sustain their current lifestyle when they do retire. So his answer is, oh, just keep working longer - arghh!!

Second of all, these so called "financial planners" assume people need 85% of their working income after they retire in order to maintain their standard of living. Oh great! Just what I want to do in retirement - downgrade my quality of life so I can get by.

The fact that this article seriously believes that people's only two options for surviving post-retirement is by either contributing to their 401K or paying down their house just shows how misguided most of the information out there is, and it's why these strategies aren't working!

Instead of paying down your mortgage and being a sitting duck for the bank to pick off when you can't make your mortgage payment in retirement (after all, who do you think they'll want to foreclose on first - the person with no equity or the person with a ton of equity?), take those extra payments and invest in real estate.

Instead of contributing the max to your 401K, whose returns are historically low after all expenses are taken out, only contribute what the employer match is and use the extra money to invest in real estate.

The fact of the matter is, the rich and super rich in this country have a portofolio of over 80% in real estate. If you want to be secure in retirement, do what they do and start finding ways to earn passive income.

Thanks for sharing, Jimmy. Articles like these amaze me!