Rank these FIRE priorities

[janegold]

I would prioritize funding the retirement accounts, and then paying off the mortgage. If the worst happened and you weren't able to fully fund your kids' college educations, it wouldn't be the end of the world.

And here's hoping no more serious head injuries for your H!

[plutosmoon]

I'd do retirement accounts first, then mortgage, then SS, then DD

[babsbunny]

Jun 22, 2021 20:16:01 GMT -5 janegold said:

I would prioritize funding the retirement accounts, and then paying off the mortgage. If the worst happened and you weren't able to fully fund your kids' college educations, it wouldn't be the end of the world.

And here's hoping no more serious head injuries for your H!

Ditto

[RockNVoll]

Retirement above all else. As in, I would stop paying extra on the mortgage and put that towards the retirement savings. Assuming you have a relatively low mortgage rate and would invest the extra capital you'd otherwise put towards the loan, the math says the average rate of return on a broad index fund over 20-30 years will exceed what you save by paying more on your mortgage.

After that, you can go back to paying more on your mortgage if you like, but that's never been a priority for me and I, personally, would keep it in the market and take my time paying the mortgage.

The college funds would be way down the list. They can always take out loans and/or apply for scholarships.

[steamboat185]

Retirement and then house. That is what we’ve chosen anyway. Retirement is needed and the house is a solid asset. The kids college fund while important is not a FIRE priority because who knows what college will look like in 13 years and if the kids will want to go. We put money into a general investment fund that is intended for them.

[sadlebred]

I also hope there are no more head injuries for your H!

I agree that your should prioritize retirement over everything else. Kids can also go to a state college if they want to/need to. Maybe put a small amount per month into a 529 for DD; you have a lot more time to save for her.

[MrsE]

Jun 22, 2021 20:25:34 GMT -5 babsbunny said:

Jun 22, 2021 20:16:01 GMT -5 janegold said:

I would prioritize funding the retirement accounts, and then paying off the mortgage. If the worst happened and you weren't able to fully fund your kids' college educations, it wouldn't be the end of the world.

And here's hoping no more serious head injuries for your H!

Ditto

Tritto.

[daisyduck]

I'll be the lone dissenter and say that I would pay off the mortgage. I agree with others that technically if you have a low interest rate loan your money will do more for you if it's invested, but some money decisions need to be about what gives you the most security and peace of mind. The situation you are most worried about is if your DH loses the ability to work, not getting to retire ASAP. If I were to become the sole money maker in my house, I'd be much more comfortable doing that with no debt than with an expensive mortgage payment hanging over my head.

DH and I prioritized paying off our mortgage very quickly and haven't had one in several years. The freedom that comes with not having a mortgage is pretty amazing and then you can throw a ton of money into retirement. I would not stop contributing to retirement to pay off the mortgage. Keep doing however much you are now and just throw extra money at the mortgage until it is paid off. Then I would throw even more money at retirement.

[Cappy]

Jun 23, 2021 21:59:56 GMT -5 daisyduck said:

I'll be the lone dissenter and say that I would pay off the mortgage. I agree with others that technically if you have a low interest rate loan your money will do more for you if it's invested, but some money decisions need to be about what gives you the most security and peace of mind. The situation you are most worried about is if your DH loses the ability to work, not getting to retire ASAP. If I were to become the sole money maker in my house, I'd be much more comfortable doing that with no debt than with an expensive mortgage payment hanging over my head.

DH and I prioritized paying off our mortgage very quickly and haven't had one in several years. The freedom that comes with not having a mortgage is pretty amazing and then you can throw a ton of money into retirement. I would not stop contributing to retirement to pay off the mortgage. Keep doing however much you are now and just throw extra money at the mortgage until it is paid off. Then I would throw even more money at retirement.

I agree with this as well. Even if you have oodles of retirement money you may not be able to access it when/how you need due to age/taxes/other restrictions. Reducing that fixed expense of housing makes sense for this scenario. I'd also start looking into what the insurance breakdown would look like if he stopped working. 

[penguinsidecar]

Not exactly the question that you asked - but you should maybe also consider getting a private long term disability policy for him. If he's high income and requires his brain to do his job - it's possible that he could qualify for long term disability, rather than just straight 'retirement' if brain injury stops him from working. 

Obviously do a lot of due diligence before committing to that (prior brain injury may preclude his insurability)- but I'm aware of people that have been able to essentially 'retire' disabled on like 70% of their prior income using Long term disability policies. 

Beyond that: I'd put all money I could until I felt like retirement was truly in coast-FIRE mode. If your mortgage is at the current rates (~3%), I would not try to pay that off at all until everything else was funded. I might even buy more taxable investments rather than pay off the mortgage - you can always sell in a lump sum and pay it off at some point if you really want that security.  

[aspentosh]

I don't know what you mean by "retirement accounts", but if you could just do investment instead of truly retirement accounts, you could always save save save and if you need to (or choose to) pay off the mortgage, you have that lump sum available. I think if you can earmark things for long term savings, then they can be used how you need them in the moment. Mortgage pay down, college loan, etc.

Maybe that is what you meant, and if it is I apologize for the rambling. I just know that even though we overpay on our mortgage, I still like the liquidity of money in the market, especially with it being so bullish.

Sorry about your H's struggles and I hope he is ok!

[RockNVoll]

Jun 24, 2021 20:01:25 GMT -5 spearmintleaf said:

Jun 24, 2021 15:21:55 GMT -5 aspentosh said:

I don't know what you mean by "retirement accounts", but if you could just do investment instead of truly retirement accounts, you could always save save save and if you need to (or choose to) pay off the mortgage, you have that lump sum available. I think if you can earmark things for long term savings, then they can be used how you need them in the moment. Mortgage pay down, college loan, etc.

Maybe that is what you meant, and if it is I apologize for the rambling. I just know that even though we overpay on our mortgage, I still like the liquidity of money in the market, especially with it being so bullish.

Sorry about your H's struggles and I hope he is ok!

We max out available retirement vehicles before we hit 20% savings, so yes I mean general money in the market which would be earmarked for retirement growth but wouldn’t be locked into that use specifically.

This is also what I meant by prioritizing retirement, though I was completely unclear about that.  I consider all my savings "retirement" money, not just the dollars in my IRA/401(k) accounts.  So I agree with those who are saying you can invest and grow your savings in easily-accessible taxable accounts and use that to pay off the mortgage at some point if you so choose.  Of course, this assumes you prefer the (pretty high) chance for 6-7% average annual return rates on an index fund vs. the guaranteed return of whatever your mortgage rate is. 

[tcu2003]

Jun 24, 2021 10:04:24 GMT -5 spearmintleaf said:

Jun 24, 2021 8:57:00 GMT -5 penguinsidecar said:

Not exactly the question that you asked - but you should maybe also consider getting a private long term disability policy for him. If he's high income and requires his brain to do his job - it's possible that he could qualify for long term disability, rather than just straight 'retirement' if brain injury stops him from working. 

Obviously do a lot of due diligence before committing to that (prior brain injury may preclude his insurability)- but I'm aware of people that have been able to essentially 'retire' disabled on like 70% of their prior income using Long term disability policies. 

Beyond that: I'd put all money I could until I felt like retirement was truly in coast-FIRE mode. If your mortgage is at the current rates (~3%), I would not try to pay that off at all until everything else was funded. I might even buy more taxable investments rather than pay off the mortgage - you can always sell in a lump sum and pay it off at some point if you really want that security.  

I had thought of LTD insurance but I figured because he has several documented head injuries (including visible lesions on one scan) already that it would be prohibitively expensive. He is under insured for life insurance because of his history and how expensive it is. Between his private policy, his work policy, and our investments I’d have like 1.5 million and shame on me if I can’t make that work, but it still makes me nervous. But, maybe we should get a quote.

Can he get LTD insurance through work? He might not need the health review if it’s an employer policy.

[carmenere]

Jun 24, 2021 10:04:24 GMT -5 spearmintleaf said:

Jun 24, 2021 8:57:00 GMT -5 penguinsidecar said:

Not exactly the question that you asked - but you should maybe also consider getting a private long term disability policy for him. If he's high income and requires his brain to do his job - it's possible that he could qualify for long term disability, rather than just straight 'retirement' if brain injury stops him from working. 

Obviously do a lot of due diligence before committing to that (prior brain injury may preclude his insurability)- but I'm aware of people that have been able to essentially 'retire' disabled on like 70% of their prior income using Long term disability policies. 

Beyond that: I'd put all money I could until I felt like retirement was truly in coast-FIRE mode. If your mortgage is at the current rates (~3%), I would not try to pay that off at all until everything else was funded. I might even buy more taxable investments rather than pay off the mortgage - you can always sell in a lump sum and pay it off at some point if you really want that security.  

I had thought of LTD insurance but I figured because he has several documented head injuries (including visible lesions on one scan) already that it would be prohibitively expensive. He is under insured for life insurance because of his history and how expensive it is. Between his private policy, his work policy, and our investments I’d have like 1.5 million and shame on me if I can’t make that work, but it still makes me nervous. But, maybe we should get a quote.

It definitely doesn't hurt to get a quote.  Like PP, also look into whether his employer offers LTD because it may not require medical history.

[sometimesrunner]

I agree with the others that say throw every penny at retirement. I'm assuming with these numbers that most of your extra isn't going into an actual retirement vehicle and just earmarked for retirement, which gives you so much flexibility. Should something happy to your H, you can pull what you need from these funds to cover the mortgage.

[waverly]

I might put some into savings. What happens if he becomes disabled before he can access retirement accounts? Let’s say he gets disabled at age 50 but can’t access retirement accounts until age 59 without a tax penalty, what would the plan be for those 9 years?

I agree look into a disability policy just to see, check on his disability insurance through work. Also would social security disability come into play?

Cash is king in an emergency, so I wouldn’t want it all tied up in mortgage or retirement.

Otherwise retirement makes the most sense. My parents got divorced and my mom bought my dad out so he has no where to live now. Never bought another house so he has no equity and will have to rent the rest of his life. That was his choice. On the flip side I can see a paid off house being a huge sense of security.

[dragon's breath]

If you haven't refinanced recently, I'd refinance the balance of the loan on a 30 year mortgage. This should hopefully lower payments so that if he loses the ability to work, you could still afford them on your own. Then choose whether or not to pay extra (though I wouldn't with today's rates--I'd rather save and invest, and pay it off in full later, if investments do well and I didn't want the mortgage anymore).

Then I'd definitely put retirement above the other options. The children can get scholarships and loans if needed, and if you are both still working, you can cut back a little when the time comes and help cashflow college then.

Also look into what he'd make with disability, he may get SS, which could help out some. My job does not offer short term disability, but we do have a disability retirement that I could live on just fine.

[sillygoosegirl]

I would prioritize retirement. Especially Roth (or backdoor Roth) if you can. Initial Roth investments (after 5 year wait if it's backdoor/rollover) are still available to withdraw without penalty in the event that you change your mind or your circumstances change, including the option to use it for college if that's what makes sense down the road.

Ultimately, if it comes down to it, you (or if necessary, your kids) can borrow money for everything except retirement. And if you really need to, you CAN access your retirement savings for other things.

Another key point is that should you need help paying for college, need based aid generally weights your retirement accounts much much less vs college savings accounts and non-earmarked accounts. So if you don't have money for college and retirement, it's one more reason you want the money you do have in a retirement account.

Also, is there anything more that can be done regarding PPE to prevent future head injuries? I know I consider safety gear to be the 100% best investment I make for my family's future. I realize there's only so much you can do with certain occupations and hobbies and bad luck in life in general, but it's not something you want to cheap out on.

[awkwardpenguin]

I'd stop paying extra on the mortgage and focus on maxing all available retirement vehicles, followed by saving in a taxable investment account. I'd basically forget about saving for college in 529s and I agree with the advice to refi to a 30 year. Basically build as much flexibility into your plan as possible.

I hope your H avoids more injuries and is able to work for a long time!

[niq]

Jun 29, 2021 10:11:49 GMT -5 awkwardpenguin said:

I'd stop paying extra on the mortgage and focus on maxing all available retirement vehicles, followed by saving in a taxable investment account. I'd basically forget about saving for college in 529s and I agree with the advice to refi to a 30 year. Basically build as much flexibility into your plan as possible.

I hope your H avoids more injuries and is able to work for a long time!

Seconded! Well, I'd only do the refi part IF you can actually commit to putting the extra monthly $ into savings/investments.

[Roc A Bee]

When you say you make enough to live on, I assume that means you can afford the house payment.

I’d save for retirement first. Next would be the house and very very last would be college savings.