Agreed. We are discussing a topic that is relatively unimportant in the larger scheme of things. At first glance, the answer would be, "No, you're not ready pay off your mortgage because you don't have the fundamentals in place yet."3-20Characters wrote: ↑Wed Aug 28, 2019 6:18 am OP, you’re asking the wrong question. I’m afraid that you may not understand your risk—which is high for sequence of returns. Your portfolio is almost 90% S&P 500. Make sure your AA is one that you’re comfortable with instead of finding out it’s not a couple of years from retirement date—just before the salary spigot turns off abruptly.
Vanguard - Determine your asset allocation
Also, figure out your expenses at retirement and see how much of that your portfolio income has to support (after SS). As for the mortgage, how would you pay it off? I think you’re thinking of cutting back on retirement contributions? If so, are you leaving employer matching funds on the table? That I would never do!
You're making $400,000-$500,000 per year. You're going to have to figure out how much you're going to want--and need--to spend each year once the earnings stop. You can't really make a plan, let alone decide if you've met your goals, until you've done that.
There are many, many ways to tap a portfolio, but a very loose estimate you might want to consider when you first retire is this: for every $1M you have, you'll take $40,000. So before we even consider what do you with your mortgage, you'll want to go back to basics and ask yourself how much your portfolio can generate when you're no longer working.
A couple of red flags jump out which you might have very quick and easy answers to:
You're making a reasonable salary. The amount of savings you have currently is far less than someone would generally have in that salary range although there might be extenuating circumstances (perhaps you went from making $100,000 per year to $500,000 per year in a very quick period of time). So at first glance, I'm skeptical that your portfolio will generate enough income for you but perhaps you've worked that out.
Your sequence of return risk is quite high. It doesn't sound like you're familiar with bonds or fixed income in general. Consequently, I'd take a step back and learn about the fundamentals of designing a portfolio to suit your needs; our Wiki page is a great resource for this. You can start with the basics and go on from there.
Only after you've put together an outline of your needs and goals can you then answer a question about your mortgage. The mortgage question is insignificant compared to the other issues above.