តើខ្ញុំគួរបង់រំលោះ ឬវិនិយោគលើស៊ីឌី? ខ្ញុំ​បាន​បញ្ចាំ​ប្រាក់កម្ចី​របស់ខ្ញុំ​ឡើងវិញ​នៅ 2.375%, ប៉ុន្តែ​ខ្ញុំ​អាច​ទទួលបាន​ស៊ីឌី​នៅ 4% ។ លើសពីនេះទៀតខ្ញុំចង់ចូលនិវត្តន៍ក្នុងរយៈពេល 7 ឆ្នាំ។

I’ve been debating whether to pay off my mortgage. I’ve refinanced at 2.375% and can get a certificate of deposit (CD) for a year at 4%. I was adding to my mortgage payment by about $1,000 a month to pay it off in seven years instead of 14 years. I want to retire in seven years, and though my Social Security will be around $3,500, and my husband will still be working, I’m not sure if that is wise.

-Jan

ថាតើអ្នកគួរតែ បង់រំលោះទាន់ពេល or invest more depends on what you’d hope to gain by choosing one over the other. It could be that you simply want to choose the option that leaves you better off financially. But you may want to consider risks, the effect on your budget, and purely nonfinancial factors as well.

Here’s how to think through this decision. (This tool can help match you with potential advisors while you navigate the lead-up to retirement.)  

Comparing Your Mortgage Rate to Investment Return

Many people like to frame the decision of whether they should pay off their mortgage as a tradeoff between 

the interest rate on their mortgage and the return they could earn if they had invested that money instead.

The idea is that if they can earn a higher rate of return than what they pay in interest, they are better off. As a baseline, that is a logical approach.

But another element of that decision is the risk associated with the investments. For example, suppose the money is instead invested in a stock portfolio. Even in a well-diversified one, there will be fluctuations in that portfolio’s value. That same element of risk isn’t present when you pay down a debt balance with a fixed interest rate. That’s because you know the amount that you save – it’s that fixed interest rate. 

So, the question evolves. You really need to compare the interest rate on your mortgage to the rate of return you can reasonably expect to earn on a portfolio that exposes you to an amount of risk you are comfortable with. Your time horizon matters a great deal in that analysis, and you should consider it. (This tool can help match you with potential advisors while you navigate the lead-up to retirement.) 

រឿងរ៉ាវនៅតែបន្ត

In any case, 2.375% is an incredibly low interest rate. It would be easy to make a mathematically supported argument for not paying that balance down any sooner than you have to. If you take the ស៊ីឌីមួយឆ្នាំ at 4%, that’s a fixed rate, so you won’t have the same volatility considerations as you would with a longer-term investment. 

Just be sure to account for the tax implications. That CD interest is taxable. You may also be getting a tax deduction for the interest you’re paying on the mortgage. 

Consider Your Preference in Retirement

You may not want to base your decision purely on a mathematical comparison. Consider your preferences and emotions, especially as you eye your potential retirement in seven years. 

Many people get a significant amount of satisfaction from paying off their mortgages.  Knowing that they own their home is appealing to them.

While you can’t put an exact dollar value on that satisfaction, you can approximate it. How? Simply ask yourself if you’d rather have the amount you estimate you’ll have if you save that extra payment in seven years or a paid-off house. 

For some people, that satisfaction and the relief it brings are worth a lot. They would choose a paid-off house over saving a large sum of money. For others, it isn’t worth much. They might choose to keep the mortgage and invest more, even if saving the money only results in a small gain relative to paying it off early. (This tool can help match you with potential advisors while you navigate the lead-up to retirement.) 

As people enter retirement and no longer receive paychecks, they tend to shift their preference in favor of a paid-off house. That’s understandable, and not having a mortgage payment in retirement certainly increases the amount of flexibility in your budget. You imply in your question that this may be an important factor for you, or at least that it’s on your mind. 

បន្ទាត់​ខាង​ក្រោម

Start with the mathematical comparison. From there, consider how much weight you want to give to those other factors. Finally, make your decision based on the totality of the situation. 

Brandon Renfro, CFP® គឺជាអ្នកសរសេរអត្ថបទរៀបចំផែនការហិរញ្ញវត្ថុ SmartAsset ហើយឆ្លើយសំណួររបស់អ្នកអានលើប្រធានបទហិរញ្ញវត្ថុ និងពន្ធផ្ទាល់ខ្លួន។ មានសំណួរដែលអ្នកចង់ឆ្លើយទេ? អ៊ីមែល [អ៊ីមែលការពារ] ហើយសំណួររបស់អ្នកអាចត្រូវបានឆ្លើយនៅក្នុងជួរឈរនាពេលអនាគត។

សូមចំណាំថា Brandon មិនមែនជាអ្នកចូលរួមក្នុងកម្មវិធី SmartAdvisor Match ទេ ហើយគាត់ត្រូវបានផ្តល់សំណងសម្រាប់អត្ថបទនេះ។

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Photo credit: ©iStock.com/Eleganza, ©iStock.com/Dean Mitchell

ប្រកាស Ask an Advisor: Should I Pay off My Mortgage or Invest in CDs? I Refinanced My Mortgage at 2.375%, But I Can Get a CD at 4%. Plus, I Want to Retire in 7 Years. បានបង្ហាញខ្លួនជាលើកដំបូង ប្លក់ SmartAsset.