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      09-25-2021, 09:15 AM   #19
zx10guy
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Quote:
Originally Posted by 2000cs View Post
Good points, especially about taxes. Id forgotten that tax brackets are not indexed to inflation, meaning as inflation pushes up wages or Social Security income, it also pushes you into a higher tax bracket. So inflation helps government in two ways: deflates the value of the debt, and increases tax revenue.

Curious why you want to pay off houses if you have fixed rate mortgages. Understand completely if they are variable rate (those rates will rise, driving payments up).
I sat down with my financial advisor and he worked some numbers to show what my life would be in retirement. I hadn't even thought about what my tax situation would be in retirement. He did this as a way for me to proactively control what tax bracket I would fall under so I can start thinking of ways to position myself instead of just letting it happen. So the reason why I'm looking to pay off my mortgages even though they're all fixed rate and low interest is because it'll make up a good chunk of my expenses into retirement. If I have them paid off, I don't have to draw that amount out of my retirement accounts which then would be taxable as income. I can keep my draw rate low which then keeps me in a lower tax bracket due to lower annual income. And the side effect is leaving more in my accounts to continue to work towards growth.

Hopefully, what I said makes sense.
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