[Aarti]

Where would you park ~ 600k worth of money for paying off mortgage in the next 2-3 years. HYSA is no use because it is liquid but the interest earned will be taxed at 40% for me (because of my tax bracket).

I think paying off mortgage would significantly improve the quality of my life (against all financial advice or logic, feels emotionally right) and I don’t want that money to be in the market since I plan to pay if off sooner.

[Juliett]

What’s your interest rate? Even if you paid taxes, I think the hysa would still be worth it.

I assume you max out all pretax accounts.

[Otis]

Just use a HYSA and make an extra $27,000 a year and just pay taxes.

It’s an extra $16,200 a year for literally nothing

[Timothy]

If you have 500k+ and can wait 3 years you should look at getting a Golden passport from Portugal.

[Danny]

Boxx or just pay it off now? I’m not sure of the gymnastics of saving the money for 3 years.

Also, even if you’re in the 40% tax bracket, your effective tax rate is not 40%

[Poly]

Tax free muni funds (not individual bonds!), you will get tax free dividend payment on a monthly basis without risking your principal.

Look for funds that never go below $1.00.

If your state has tax, then look for the one that is tax free on both federal and state level (ex. CA, NY, NJ, etc have individual funds due to state taxes)

[Bill]

So, you don’t care about losing 7% growth compounding for years but are super concerned about paying tax equivalent to 1.6%.

It’s your money and all, but I think you have to pick a lane here and decide to either invest or pay it off immediately.

[Scott]

Pay it toward the mortgage now and you’ll be “earning” the equivalent of your current interest rate.

[Heather]

Why are you going to hold on to it if you want it to pay off your mortgage?

Just pay off your mortgage.

[Chris]

Unless you can earn more with the investment than the interest rate on the loan, why not pay it off now.

[Jasmine]

Why wait 3 years? Is there a big penalty for paying off too early?

If so, run the numbers and compare to the interest you’d save by clearing the mortgage right now.

[Lisa]

If you don’t want the interest from HYSA, place in a regular savings account of 1-2% as it won’t effect your tax rate as much…

[Author]

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