I Paid Off My Mortgage – Should You?

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(Here is a pdf of this article, one of my personal finance columns I write for a national Emergency Medicine newsletter.  Find more of them here.)

I cut a check and paid off my mortgage in February, making me debt-free.  It cut my living expenses by about a third and ensured that in four years, at the age of 45, I’ll be financially independent and eligible for military retirement. What a glorious feeling! Should you pay off your mortgage as soon as you can?

Benefits of Paying Off Your Mortgage

You have one less thing to worry about!  You’ve got food.  You’ve got water.  Now you’ve locked in your shelter and may be debt-free on top of that.  You can move from “safety” to “love and belonging” on Maslow’s hierarchy of needs.

It reduces your fixed monthly expenses, which goes a long way toward setting you up for retirement, fewer shifts, or even an alternative career path.  Housing is usually a large percentage of your monthly expenses, and everyone who decides to purchase their primary domicile should make being mortgage-free a major goal by the time of retirement.

It saves you money, since you’ll likely save tens of thousands of dollars in interest you otherwise would have paid.  In addition, if you no longer have a mortgage you should be able to reduce the amount of life and disability insurance you are paying for each month.

Without a mortgage, you can save and invest more money every month.  Before I paid off my mortgage I saved 30% of my gross income.  I’m not sure how much I’ll save now, but it’ll be more than 30%.

When you pay off your mortgage, you are getting a guaranteed rate of return on the investment.  In my case, the rate on my mortgage was 3%.  I’m usually in the 33% tax bracket, which means that every dollar I put toward paying off my mortgage earned me a guaranteed return of 2%.  This is a remarkably similar return when compared to most low-risk bond yields in recent years.  In fact, this is exactly why I paid off my mortgage.  I wanted to have a small portion of my retirement savings in bonds, but it made no sense to own bonds that would pay me 3-4% while paying 3% on my mortgage.  Paying down your mortgage is a reasonable substitute for buying bonds.

There can be asset protection benefits to paying off your home loan.  Some states provide unlimited asset protection for home equity, which makes it nearly impossible to lose your home if a lawsuit doesn’t go your way.  Other states, however, protect very little of your home equity.  If you want to see what your state protects, go to this link and look for each state’s “homestead exemption”:


If you are paying a financial advisor who charges you a fee based on a percentage of your assets under management, by taking some of those assets and using them to pay off your house you reduce your investment expenses.

Benefits to Keeping Your Mortgage

When you make your mortgage payment, some of it goes toward principle and increases the equity in your home.  For me this was about $2000/month of forced savings.  If you are not financially disciplined, making a mortgage payment will ensure that every month you are squirreling away at least a little bit of money.

Mortgage rates are still near their all-time lows.  If you can borrow money at 3-4% and invest it in something that will give you a higher net return, it makes sense to invest the money instead of paying off the mortgage.  That said, you have to make sure that you actually invest the money.  In addition, there are very few investments that guarantee a return greater than your mortgage.  Actually, there probably aren’t any, because of the word “guarantee.”  Yes – stocks, high-yield or corporate bonds, real estate, etc. will probably make more than 3-4%, and you can protect yourself by diversifying – but that is certainly not guaranteed.

The after-tax mortgage rate you are paying may be below inflation.  For example, my after-tax mortgage rate was 2%. If inflation had been above 2%, I would have been getting paid (in real terms) to borrow money!

The value of real estate tends to rise with inflation but your mortgage payment is fixed, so when inflation increases the value of your house but your mortgage payment remains the same, you are paying the loan back with dollars that are worth less and less as time goes on.  When your mortgage is paid off, you give up this benefit.

What Should You Do?

Like most financial decisions, situations vary and this decision can be complicated.  The best on-line article I could find that goes through all the complexities of the issue, which my brief article does not, can be found here:


You should always maximize contributions to your retirement accounts, pay off all non-mortgage debt that has a higher interest rate, and save for your children’s education before you consider paying your mortgage off early.  But if you find yourself having taken care of all of this, and weighing investing in bonds versus paying off your mortgage, you can’t beat the peace of mind that comes with being mortgage-free!

Navy Incentivizes the PRT for Sailors

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WASHINGTON (NNS) ­­ The Navy announced several changes Tuesday to its Physical Readiness Program in NAVADMIN 141/17, including an incentive for Sailors to validate one physical readiness test (PRT) each year based on their fitness performance.

Chief of Naval Personnel Vice Adm. Robert Burke said that during his fleet visits he often hears ideas from Sailors on how to improve the Navy’s PRT process.

“I want Sailors to know we’ve heard them,” Burke said. “Many Sailors work hard to maintain high levels of physical fitness year­ round and I believe this provides an incentive to continue to excel. This effort is aimed at both incentivizing physical fitness and also reducing administrative distractions throughout the fleet.”

Those Sailors who pass the body composition assessment (BCA), are within the Navy age­ graduated body fat standards, and score an overall “excellent low” or better on the PRT, with no single event lower than a “good low,” will be exempt from participation in the next test. These changes will be effective Jan. 1, 2018, but be based on a Sailor’s performance during the second PRT cycle of 2017.

All Sailors, regardless of PRT performance will still be required to participate in the BCA each cycle. If a Sailor who is exempt from taking the PRT fails the BCA, they will be required to participate in the PRT that cycle.

Additionally, the Navy is also eliminating the use of elliptical machines as an alternate cardio device for use because of low­ usage across the fleet during the PRT. This decision was based on two factors. First, less than 4 percent of the Navy uses the elliptical for the PRT, and maintaining PRT ­compliant elliptical machines was becoming increasingly cost prohibitive. Shifting to non­PRT­ compliant elliptical machines will allow for more modern elliptical machines in Navy fitness facilities. While the 1.5 mile run remains the service standard, commanding officers may still authorize the use of approved stationary bikes, treadmills or allow Sailors to swim as alternate cardio.

The Navy is also exempting post­partum Sailors from participating in the physical fitness assessment (PFA) for six months following the Sailors’ maternity/convalescent leave. This change reflects an increase to the Navy’s increased maternity leave policy of 84 days following child birth. This will ensure Sailors have adequate time to return to weight standards and pass a PRT following a pregnancy.

“We want to ensure our Sailors have adequate time to recover and succeed post pregnancy,” said Burke. “This extended time will help Sailors return to fitness levels and standards in a safe and healthy way.”


Outside the Box Opportunities

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Here are the slides for a lecture on “Outside the Box Opportunities” that I gave at the 2017 Transition to Practice Symposium at NMCSD for all the graduating residents and fellows:

Outside the Box Opportunities

Topics covered include:

Here is a video podcast:

2017 TCCC Quick Reference Guide

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Download your copy of the Tactical Combat Casualty Care (TCCC) Quick Reference Guide:

TCCC Quick Reference Guide 2017

What you get: Abbreviated TCCC Guidelines, TCCC in Algorithm Format, Pharmacology Reference specific to TCCC, Planning Considerations, and more…

Navy Overhauling its Evaluation System in Drive Toward Pay-for-Performance

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Here is an article that gives some details on the new system they are developing to replace fitness reports:

Navy Overhauling its Evaluation System in Drive Toward Pay-for-Performance

Blended Retirement System: 6 Major Considerations Before You Choose

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Here is a nice article for those debating between the current retirement system and the new Blended Retirement System or BRS:

Blended Retirement System: What Will You Do? 6 Major Considerations Before You Choose

Conference Approval Made Easy

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As put out by BUMED, here are the steps you need to take for the new/updated/easier conference approval process:

  1. Check the Conference Approval Website (you need to pick your e-mail certificate on your CAC card) for the most current ‘Requiring BUMED Approval’ List.
  2. If the conference IS NOT on the list, commands are authorized to approve travel. The member only needs to route a TAD request as per local command policy.
  3. If the conference IS on the list, members are required to work through their Specialty Leader or Quota Manager to be approved per the BUMED Conference Approval Process (similar to before).

The new process is supposed to be much easier for everyone. The intent is to make it easy for anyone to attend a conference costing < $100K, while still maintaining cognizance of conferences > $100K (without recreating an administrative burden).

NOTE – This is a summary of the new conference approval policy. Please refer to guidance posted on the Conference Approval Website (you need to pick your e-mail certificate on your CAC card) for directive guidance.