Q: My spouse and I are retired, and have been advised to refinance our home and invest the money in stocks. Do you think we should?
A: You already have equity in your home, invested in real estate. To increase your leverage by borrowing against your home to invest in the stock market, especially when you're retired, might not be a wise gamble.
With mortgage rates near historic lows, if you could fully utilize the mortgage interest deduction on your taxes, you could borrow money at a low rate. If you earned more after tax on your investments than you paid after tax on your mortgage, you’d come out ahead. It sounds simple enough, but are you sure you could do it consistently over time? Don't bet the roof over your head.
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