I receuved a settlement. Should I pay off my mortgage?

I receuved a settlement. Should I pay off my mortgage?
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#1

I received a net $500,000 settlement from a car wreck, and have paid off my credit cards, car and set up an emergency fund. I have about $360,000 left and owe $155,000 on my home, which is worth $350,000 with a 4.625% fixed rate with 25 years to go. I am 59 years old, planning to retire at 70. Should I pay off the mortgage and invest the balance with my monthly note for retirement, ir invest it all and keep paying the mortgage?


#2

Hi neetsie - thanks for joining our community! We’re excited to have you. :slightly_smiling_face:

I’m really sorry to hear about your car wreck and can only imagine the obstacles you’ve had to overcome (mentally, physically, financially) to get to this point.

While I don’t personally have a specific suggestion, you’re asking really important and thoughtful questions, so hopefully someone else from our community can help weigh in.
And it would also be really helpful for them to know a bit more information about your future plans:

  • Are you planning to stay in your home, or are you thinking of selling? - If so, what is your timeline?
  • Are you on track financially to retire at your targeted age? - Our retirement calculator can help determine this.

In the meantime, the following resources can help you think through your options:


#3

Hi neetsie and welcome! Being debt free in retirement is great, but being house poor is not. Houses don’t typically generate income (especially if you don’t rent out rooms or plan to be an AirBnB host) so you want to be sure you have enough money invested to tide you over for retirement before you consider paying off the mortgage. Here’s a column I wrote about that decision:

Since you got some ready cash, I’d encourage you to look for a fee-only financial planner who can help you assess your situation. We got some great resources for finding one: