Haze of Indecision/ Years before I get there

[bdhu2001]

• Okay, I pulled money out of my 403b for a down payment on my new house (I'm retired so there was no penalty).
• Initially I was fixing up my old house as a rental, but later decided to sell it.
• After the sale of my old house, I paid off all credit bills and student loan, purchased a hot tub, fixed new house, & I put  remaining funds in CD (because I can't add funds to 403B after retirement).  In retrospect, I should have paid the money on new house to reduce the # of years of payments. 
• Stopped monthly payments/ disbursements from 403B (because I withdrew funds for down payment and couldn't put funds from sale of old home in account). 

Okay those are the moves I've made good or bad, but I love my new house, new area, and living closer to my adult children. Now I can't figure out what I want to do, besides pay extra on my current house to pay it off early.

1. Currently, I'm paying $500 per month extra on the new house to pay it off 10 years early (20 years).  Easy
2. By rolling the maturing CD's into the loan as they mature, I pay off the loan 11 years early (19 years).  Easy
3. Pay $500 extra on house & save $300 per month to remodel master bath.  Effort, but get nicer bathroom right away (I'd finance the remodel).
4. If I pay $800 extra per month and roll in the CD funds as it matures, I can pay off the house in 16 years. Effort
5. If I pull $800 per month from my 403b($1600 extra per month) & roll in CD funds, I can pay house off in 11 years. The interest on my 403b was 3.64% for past year, but it's 18.59% for past three years.  The interest I pay on my new house is 4.125%  Effort and receiving payments from 403b.

What to do, what to do, what to do?

[Fox342]

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@bdhu2001 wrote:

• Okay, I pulled money out of my 403b for a down payment on my new house (I'm retired so there was no penalty).
• Initially I was fixing up my old house as a rental, but later decided to sell it.
• After the sale of my old house, I paid off all credit bills and student loan, purchased a hot tub, fixed new house, & I put  remaining funds in CD (because I can't add funds to 403B after retirement).  In retrospect, I should have paid the money on new house to reduce the # of years of payments. 
• Stopped monthly payments/ disbursements from 403B (because I withdrew funds for down payment and couldn't put funds from sale of old home in account). 

Okay those are the moves I've made good or bad, but I love my new house, new area, and living closer to my adult children. Now I can't figure out what I want to do, besides pay extra on my current house to pay it off early.

1. Currently, I'm paying $500 per month extra on the new house to pay it off 10 years early (20 years).  Easy
2. By rolling the maturing CD's into the loan as they mature, I pay off the loan 11 years early (19 years).  Easy
3. Pay $500 extra on house & save $300 per month to remodel master bath.  Effort, but get nicer bathroom right away (I'd finance the remodel).
4. If I pay $800 extra per month and roll in the CD funds as it matures, I can pay off the house in 16 years. Effort
5. If I pull $800 per month from my 403b($1600 extra per month) & roll in CD funds, I can pay house off in 11 years. The interest on my 403b was 3.64% for past year, but it's 18.59% for past three years.  The interest I pay on my new house is 4.125%  Effort and receiving payments from 403b.

What to do, what to do, what to do?

---

First of all congratulations on your retirement!  I would imagine that since you have a 403b that you're a retired school teacher or something similar.  And since you actually have money in your 403b it sounds like you've made some smart decisions financially.  

There is some information missing from your post that would help myself and others in giving you advice, but you may not want to divulge this information, and I understand that.  Some information that could be helpful such as.  What is the balance of your 403b?  What is your age?  Do you have other income?  Personally I don't think any of the options you've posted are bad, but some my be better than others.

• After the sale of my old house, I paid off all credit bills and student loan, purchased a hot tub, fixed new house, & I put  remaining funds in CD (because I can't add funds to 403B after retirement).  In retrospect, I should have paid the money on new house to reduce the # of years of payments. Is there some reason you can't use that money to pay down the house now?  I understand there are penalties for early withdrawal from a CD, but the interest rate you're getting on the CD is probably less than the mortgage interest rate so it sounds like you would come out better to pay the house down to me.

I will assume that you are at least 59 1/2 since you withdrew money from your 403b without penalty.

1. Currently, I'm paying $500 per month extra on the new house to pay it off 10 years early (20 years).  Easy 20 years is a long time...you'll be at least 80.
2. By rolling the maturing CD's into the loan as they mature, I pay off the loan 11 years early (19 years).  Easy  Again, that's a long time...you'll be at least 79.
3. Pay $500 extra on house & save $300 per month to remodel master bath.  Effort, but get nicer bathroom right away (I'd finance the remodel).  Why not save $800 a month to remodel the bathroom and pay with cash?
4. If I pay $800 extra per month and roll in the CD funds as it matures, I can pay off the house in 16 years. Effort  Shorter time period, better in my opinion...you'll be 75.
5. If I pull $800 per month from my 403b($1600 extra per month) & roll in CD funds, I can pay house off in 11 years. The interest on my 403b was 3.64% for past year, but it's 18.59% for past three years.  The interest I pay on my new house is 4.125%  Effort and receiving payments from 403b.  Difficult to say without knowing your age, and whether or not you have other income.  But I agree with paying the house off as early as possible even if it meant getting a part time job.  We all know that our health will probably get worse with age and we'll need more money for medical and other expenses, not to mention work is harder at an older age if you then decide that you need more money.  Not having a house payment during that time will be financially beneificial and probably make you sleep better at night too knowing that the house is paid for.  

Like I said, I don't think any of your options are bad, but I think paying the house off sooner is better for the reasons I mentioned.  Hopefully my input helped a little or at least made you think of some other options.  Either way, congratulations on saving for your fincancial future, and enjoy your retirement!

Fox

[bdhu2001]

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@Fox342 wrote:

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@bdhu2001 wrote:

• Okay, I pulled money out of my 403b for a down payment on my new house (I'm retired so there was no penalty).
• Initially I was fixing up my old house as a rental, but later decided to sell it.
• After the sale of my old house, I paid off all credit bills and student loan, purchased a hot tub, fixed new house, & I put  remaining funds in CD (because I can't add funds to 403B after retirement).  In retrospect, I should have paid the money on new house to reduce the # of years of payments. 
• Stopped monthly payments/ disbursements from 403B (because I withdrew funds for down payment and couldn't put funds from sale of old home in account). 

Okay those are the moves I've made good or bad, but I love my new house, new area, and living closer to my adult children. Now I can't figure out what I want to do, besides pay extra on my current house to pay it off early.

1. Currently, I'm paying $500 per month extra on the new house to pay it off 10 years early (20 years).  Easy
2. By rolling the maturing CD's into the loan as they mature, I pay off the loan 11 years early (19 years).  Easy
3. Pay $500 extra on house & save $300 per month to remodel master bath.  Effort, but get nicer bathroom right away (I'd finance the remodel).
4. If I pay $800 extra per month and roll in the CD funds as it matures, I can pay off the house in 16 years. Effort
5. If I pull $800 per month from my 403b($1600 extra per month) & roll in CD funds, I can pay house off in 11 years. The interest on my 403b was 3.64% for past year, but it's 18.59% for past three years.  The interest I pay on my new house is 4.125%  Effort and receiving payments from 403b.

What to do, what to do, what to do?

---

First of all congratulations on your retirement!  I would imagine that since you have a 403b that you're a retired school teacher or something similar.  And since you actually have money in your 403b it sounds like you've made some smart decisions financially.  

There is some information missing from your post that would help myself and others in giving you advice, but you may not want to divulge this information, and I understand that.  Some information that could be helpful such as.  What is the balance of your 403b?  What is your age?  Do you have other income?  Personally I don't think any of the options you've posted are bad, but some my be better than others.

• After the sale of my old house, I paid off all credit bills and student loan, purchased a hot tub, fixed new house, & I put  remaining funds in CD (because I can't add funds to 403B after retirement).  In retrospect, I should have paid the money on new house to reduce the # of years of payments. Is there some reason you can't use that money to pay down the house now?  I understand there are penalties for early withdrawal from a CD, but the interest rate you're getting on the CD is probably less than the mortgage interest rate so it sounds like you would come out better to pay the house down to me.

I will assume that you are at least 59 1/2 since you withdrew money from your 403b without penalty. I'm 56, but close enough

1. Currently, I'm paying $500 per month extra on the new house to pay it off 10 years early (20 years).  Easy 20 years is a long time...you'll be at least 80.
2. By rolling the maturing CD's into the loan as they mature, I pay off the loan 11 years early (19 years).  Easy  Again, that's a long time...you'll be at least 79.
3. Pay $500 extra on house & save $300 per month to remodel master bath.  Effort, but get nicer bathroom right away (I'd finance the remodel).  Why not save $800 a month to remodel the bathroom and pay with cash? If there is a two year same as cash plan or etc, I'd prefer to finance it. Also the price would change while I'm saving.
4. If I pay $800 extra per month and roll in the CD funds as it matures, I can pay off the house in 16 years. Effort  Shorter time period, better in my opinion...you'll be 75. This doesn't remodel bathroom, but it's the one I'm leaning toward.
5. If I pull $800 per month from my 403b($1600 extra per month) & roll in CD funds, I can pay house off in 11 years. The interest on my 403b was 3.64% for past year, but it's 18.59% for past three years.  The interest I pay on my new house is 4.125%  Effort and receiving payments from 403b.  Difficult to say without knowing your age, and whether or not you have other income.  But I agree with paying the house off as early as possible even if it meant getting a part time job.  We all know that our health will probably get worse with age and we'll need more money for medical and other expenses, not to mention work is harder at an older age if you then decide that you need more money.  Not having a house payment during that time will be financially beneificial and probably make you sleep better at night too knowing that the house is paid for.  I have retirement income.  The 403b was to supplement my retirement since I retired early. $800 is the estimate of the amount I can pull out per month and still have the funds last 25 years. I actually plan to reduce whatever amount I take out as soon as I start getting early Social Security.

Like I said, I don't think any of your options are bad, but I think paying the house off sooner is better for the reasons I mentioned.  Hopefully my input helped a little or at least made you think of some other options.  Either way, congratulations on saving for your fincancial future, and enjoy your retirement!

Fox

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Fox, thanks for your comments. Your input has helped a lot. I think I'll put off or not bother with the bathroom remodel.  I may get a part-time job to pay off the house sooner, but the entire purpose of moving to the bay area was to be closer to my children and be available when the grand-babies start coming.

I guess I'll polish off my resume' and at least put my name out there while I'm waiting for these future grand-babies. Thanks again for your advice and comments. I do like having everything paid off & the sooner the better.  

I love budgets and what if scenarios. I should mention that my husband is not retired and he's found a job in the Bay Area, but none of my scenarios include using funds from his income. I've kept that set aside for unforeseen circumstances, entertainment, & vacations.  I'll add at least $400 to $500 to pay off the house from his income.

[Fox342]

You're welcome bdhu2001!  Glad you found some of my comments helpful.  Good luck in the future!

Fox