Why Paying Off Your Mortgage Early Can Backfire in FIRE

In this episode, Lucas and Luna break down the math behind the common FIRE debate: should you pay off your mortgage before retiring early? Using a specific example of a couple with a $300,000 mortgage at 3.5%, they compare two paths: paying off the house with a lump sum versus investing the money and keeping the mortgage. They walk through portfolio growth assumptions, sequence-of-returns risk, tax implications like mortgage interest deduction, and how capital gains from selling investments to pay off a mortgage can affect ACA subsidies and Medicare IRMAA surcharges. They also discuss high-rate scenarios where paying early does make sense. The hosts emphasize that the decision is not one-size-fits-all and encourage listeners to run their own numbers. Along the way, they share how listener support via buy me a coffee dot com slash fexingo keeps the show ad-free and independent. #FIRE #FinancialIndependence #EarlyRetirement #MortgagePayoff #OpportunityCost #FrugalLiving #FexingoBusiness #BusinessPodcast #Finance #TaxArbitrage #WithdrawalRate #SequenceOfReturns #Investing #RealEstate #Debt #PortfolioManagement #Leverage #CashFlow Keep every episode free: buymeacoffee.com/fexingo