Beware of investment advisor scoundrels

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

"I have a recently purchased home with a $180,000 mortgage for 15 years at 4.63 percent. My new investment advisor suggests refinancing into a new 30-year mortgage at 5.85 percent to 6 percent, and investing the difference in payment. He says this will allow us to retire sooner. I am 61 and was planning on retiring at 66. I understand his argument, but I hate to give up the ultra low 4.6 percent interest rate and the peace of mind of paying off the house sooner." Your investment advisor is either an idiot or a scoundrel. He is a scoundrel if the new loan he wants to put you into is one in which he has a financial interest. On a $180,000 loan, the monthly payment at 5.85 percent for 30 years is about $327 less than at 4.63 percent for 15 years. Extending the term to 30 years reduces the payment by more than the higher rate increases it. Your investment advisor wants you to invest that $327, arguing that you will be better off down the road if you do. You will be better off if the inve...