WEDNESDAY, OCTOBER 27 , 2021. THE WASHINGTON POST EZ RE A
they could reasonably outearn
that interest rate by investing in
the market, and they don’t
necessarily need that peace of
mind of paying off the mortgage,
Benz said. But for people closing
in on retirement, or who are
retired and have other assets,
paying off the mortgage could be
a great move.
“One of the best things you can
do for your plan is to reduce your
fixed expenses coming into
retirement,” Benz said. “Reduce
the head wind of ongoing
expenses and that will make you
so much more flexible in the face
of whatever might happen in
your retirement, whether it’s big
health-care bills or a bad stock
market.”
Roberts also acknowledged
that the flip side of investing the
money for a higher return is
recognizing that past
performance of the stock market
does not guarantee future
results.
“If you try to find an
investment that guarantees you
an income at the same rate of
return, it will almost surely be
lower than what you’re paying on
your mortgage,” he said.
Peace of mind — “ There’s sort
of a big psychological burden
that’s lifted,” Roberts said. “So
having the overhang of debt
payments constantly is
psychologically important. And
that might sound odd coming
from an economist, but it’s
precisely because I’m an
economist that I can recognize
the importance of psychological
factors.”
If you have the money to pay
off the mortgage and there’s not a
liquidity issue, meaning you have
enough in savings, then your
financial peace of mind is a
legitimate factor in this decision,
Benz said.
One Maryland couple plan to
retire their mortgage early in
December. They are both retired
and have more than adequate
savings. Their mortgage wouldn’t
have been paid off until 2043.
“Most people keep telling us,
‘You’re always going to owe
something,’ ” the husband said.
“Most people just don’t believe
they can be debt-free. But I just
keep remembering the loss of the
mortgage payment will help us to
save and give more.”
[email protected]($375,000 if married filing
separately). The limit is
$1 million ($500,000 if married
filing separately) if you are
deducting mortgage interest for
a home purchased before Dec. 16,
2017.
Even if you take the deduction
for mortgage interest, don’t
overestimate its value. This tax
break is a deduction, not a credit.
A tax credit reduces, dollar for
dollar, the taxes you owe. A
deduction eliminates only a
percentage of your income
subject to taxation. The 2017 Tax
Cuts and Jobs Act nearly doubled
the standard deduction,
resulting in fewer taxpayers
itemizing deductions on their tax
returns.
Now let’s look at some positive
reasons to pay off your mortgage
early.
Better cash flow — The
mortgage for most Americans is
their biggest household expense.
Getting rid of that obligation
frees up a significant amount of
cash every month. We already
know, based on data from the
Federal Reserve, that many
households have trouble
responding to a financial
emergency without having to
borrow money.
Sandy Marasco paid the
$22,000 remaining balance of
her mortgage with savings,
which was costing her $1,200 a
month. She has a 401(k) but can
get by on Social Security and a
small pension.
“I finally decided to retire, and
I wanted to get my monthly
expenses down as much as
possible,” she said. “I went
through my younger years with
too much debt. Something
disastrous would have to happen
for me not to have a place to live.”
Guaranteed return — One of
the reasons people are often
discouraged from paying off their
home loans is that they are told
they can earn more by investing
in the stock market.
But this advice ignores risk,
says Christine Benz, director of
personal finance for
Morningstar.
“If you’re retiring debt, you are
getting a positive return equal to
whatever that interest rate was
on the debt, less any tax breaks
you were getting for carrying it,”
Benz said.
For young adult homeowners,It’s been drilled
into Americans
that a mortgage is
good debt, a
liability that
shouldn’t give you
pause, even after
you retire.
But the
pandemic has
been shaking up a
lot of old financial
rules. The “Great Resignation,” as
it’s being called for those quitting
their jobs, is making a lot of
homeowners wonder whether
they should consider paying off
their mortgage early.
A record 4.3 million U.S.
workers quit their jobs in August,
according to data from the
Bureau of Labor Statistics. With
the coronavirus still surging in
areas, working comes with
health risks for many people. The
pay isn’t enough to offset the
possibility of getting covid-19, so
they quit. For others, the
pandemic death toll has made
them wonder whether their work
took too much precedence over
living their best life.
While not everyone who quits
can afford to get rid of their
mortgage early, for those who
have the option, the question is:
Why not?
I spoke with two experts to get
their take on the pros and cons of
paying off a mortgage early. Let’s
start with some of the cons.
Being house poor — “I owe
just under $80,000 on my home
mortgage,” one reader wrote. “I
am retired, and I have the cash to
pay the loan, but it will wipe out
over half of my savings. I am on
track to pay the mortgage in less
than three years.”
As much as you may want to
rid yourself of your mortgage,
don’t do it if you’ll leave yourself
with an inadequate savings
cushion, says Michael Roberts, a
professor of finance at Wharton.
Less to invest — “ The easiest
way to distill the decision down
is to think of it in terms of
opportunity cost,” Roberts said.
Ask yourself this question: Is
the interest on my mortgage
greater than what I can earn
from saving or investing this
money?
Loss of mortgage interest
deduction — If you itemize, you
can deduct home mortgage
interest on the first $750,Owners mull paying off mortgage early
Michelle
Singletary
THE COLOR
OF MONEYher “the hardest part of my job
now is pretending to look busy.”
At the U.S.-Mexico border, ille-
gal crossings have soared since
Biden took office; the 1.7 million
migrants apprehended by the
Border Patrol during the 2021
fiscal year was an all-time high.
Critics of the Biden administra-
tion say lax interior enforcement
has incentivized illegal entries.
ICE curbed some interior en-
forcement activity in 2020 to
avoid the spread of the coronavi-
rus inside immigration jails. In
the months that followed, the
detainee population dropped to
the lowest levels in more than a
decade. The current detainee
population is about 22,000, ac-
cording to the most recent agency
statistics, well below the peak of
more than 56,000 during the
Trump administration.
The Biden administration is
also facing a backlash from immi-
grant advocacy groups. They are
angry over the mass expulsion of
Haitian migrants last month
from a makeshift camp in Del Rio,
Te x., as well as plans to restart the
Trump-era “Remain in Mexico”
policy in November, which a fed-
eral court has ordered.
Activists protested by staging a
virtual “walkout” from a meeting
with top Biden immigration ad-
visers this month, with many
saying his enforcement approach
is no different than his predeces-
sor’s.
And while advocates for immi-
grants say they are encouraged by
the shift in interior enforcement,
they are unsure how DHS will
monitor ICE’s compliance with
the priorities taking effect next
month.
Maru Mora Villalpando, a 50-
year-old Mexican national living
in Washington state, said the new
policies marked “a major victory”
for grass-roots immigration or-
ganizations that have been fight-
ing to limit arrests.
S he said the Trump adminis-
tration targeted her for deporta-
tion after she publicized detainee
protests in her state, though she
had no criminal record and her
daughter is a U.S. citizen. She said
she overstayed a visa and has
lived here since 1996.
The Biden administration, in
contrast, exercised its prosecuto-
rial discretion to set aside her
case this year, clearing the way for
her daughter to sponsor her for
legal residency, she said. A few
days ago, she said, her green card
arrived.
“I’m one of the lucky ones,” said
Mora Villalpando, who plans to
return home to Mexico soon to
visit siblings she hasn’t seen in
25 years; her parents have already
died.
“This doesn’t end with me hav-
ing a green card,” she added. “...
The work will be done when ICE
is no more.”
[email protected]
[email protected]cording to agency data. That
share fell to 65 percent during
fiscal 2021. (The remaining one-
third were “immigration viola-
tors,” the data shows.)
ICE officials say the number of
serious criminals being arrested
has increased, however. Between
Feb. 18 and Aug. 31, officials said,
ICE arrested 6,046 individuals
with aggravated felony convic-
tions, compared with 3,575 in the
same period in 2020.
The agency also pointed to the
arrest of 363 sex offenders during
a targeted operation this summer,
compared with 194 during that
period the previous year. Nearly
80 percent of these offenses in-
volved child victims, ICE said.
Mayorkas’s new ICE guidelines
instruct officers to continue to
prioritize immigrants who pose a
threat to national security and
public safety, as well as recent
border-crossers who entered the
United States illegally.
“A re we going to spend the time
apprehending and removing the
farmworker who is breaking his
or her back to pick fruit that we all
put on our tables?” Mayorkas told
The Post in a September inter-
view. “Because if we pursue that
individual, we will not be spend-
ing those same resources on
somebody who does, in fact,
threaten our safety. And that is
what this is about.”
Mayorkas gave ICE officers
wider discretion to determine
whether to arrest someone, eas-
ing interim guidelines issued in
February that required senior
s upervisors to sign off on street-
level enforcement decisions.
GOP state attorneys general in
Te xas and Louisiana are attempt-
ing to stop the new enforcement
priorities from taking effect, ar-
guing in a federal lawsuit that ICE
is even failing to take custody of
some criminals.
“There is simply no way for ICE
to so significantly reduce its ini-
tial book-ins without allowing
many dangerous criminal aliens
at large in American communi-
ties,” the states said in a court
filing late last week. The Biden
administration’s “failure to de-
tain criminal aliens is imposing
significant costs on plaintiffs and
their citizens.”
The Department of Homeland
Security said this month that the
agency would discontinue mass
roundups at worksites and more
aggressively target unscrupulous
employers who exploit unauthor-
ized immigrants.
Jessica Vaughan, director of
policy studies at the Center for
Immigration Studies, which fa-
vors reducing immigration, ac-
cused ICE of a “collapse in interi-
or enforcement,” even as the
agency continues to receive bil-
lions of dollars for detention and
deportations.
“This is a public safety p roblem
that we don’t need to have,” she
said, adding that one officer toldunder the agency’s control, unlike
deportations and other metrics
that rise and fall with migration
trends at the Mexican border.
Curbing civil immigration ar-
rests within the United States
allows the Biden administration
to shield millions of longtime
undocumented immigrants from
deportation to Mexico and other
countries, even as congressional
Democrats struggle to deliver on
the president’s goal of granting
those immigrants a path to citi-
zenship this year.
But Biden is still facing criti-
cism from many corners: Te xas
and Louisiana are battling in fed-
eral court to compel the govern-
ment to arrest more undocu-
mented immigrants, while left-
leaning advocates are angry with
the administration for continu-
ing to expel newer migrants at-
tempting to cross the Southwest
border.
During the fiscal year that end-
ed Sept. 30, ERO’s 6,000 enforce-
ment officers each averaged
about 12 immigration arrests per
year, or one per month. The peak
of ICE enforcement activity dur-
ing the past decade was fiscal
2011, when ICE made 322,
administrative arrests, about
41 / 2 times the 2021 total, historical
data shows.
Asked for comment on the
data, ICE spokeswoman Paige
Hughes said the agency “is in the
process of finalizing our year-end
fiscal numbers, and these num-
bers will be shared publicly when
the review is complete. Data in-
tegrity is of the utmost impor-
tance to the agency, and ICE’s
vetted statistics powerfully dem-
onstrate the effectiveness of our
current approach of prioritizing
national security, border security,
and public safety.”
Homeland Security Secretary
Alejandro Mayorkas issued broad
new directives to ICE in late
September, saying the fact that
someone is present in the United
States illegally “should not alone
be the basis” of a decision to
detain and deport them.
But the agency had shifted
away from the priorities of the
previous administration as soon
as Biden took office, directing
officers to prioritize recent bor-
der crossers and threats to na-
tional security and public safety.
Under President Donald
Trump, ICE officers had broad
latitude to enforce immigration
laws and make arrests, and many
of those who were categorized as
“criminal” suspects were nonvio-
lent offenders or had convictions
for immigration violations such
as illegally reentering the coun-
try.
During fiscal 2020, about
90 percent of those taken into
custody by ICE officers had some
type of criminal conviction or
pending criminal charges, ac-
ARRESTS FROM A
Under Biden, ICE moves to
prioritize serious criminals
GREGORY BULL/ASSOCIATED PRESSAn Immigration and Customs Enforcement officer during an operation in Escondido, Calif., in 2019.
New ICE guidelines instruct officers to prioritize national security threats and recent border-crossers.
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