Uncertainty Means Wait

Karen's husband has been diagnosed with a potentially debilitating illness. They have the cash to pay off their home, but should they given her husband's illness?

QUESTION: Karen in Atlanta and her husband are in their late 50s and have no debt except for two years left on their mortgage. Her husband has been diagnosed with a potentially debilitating illness. They have the cash to pay off their home, but should they given her husband’s illness?

ANSWER: No, today I would not pay off the house. Really it’s not because of the potential diagnosis; it’s because of the unknown. Having walked with so many people through these kinds of things in 20 years of financial counseling and also doing ministry in general around hospitals, you find that the doctors are like mechanics in guessing why the engine isn’t running, and they tend to state the worst out of fears of malpractice or something. They add to the drama of these situations in a lot of cases. My prayer is that’s what this situation is.

Basically what you have is an unknown, and in the middle of all this unknown, they’ve thrown out a very bad possibility and are somewhat acting like it’s fact, but really it’s not, which means I’m going to go for yet another opinion somewhere else if I’m in your shoes. You’re just not done. You’re still hunting. You still are fighting an unknown enemy. In the middle of that, that $33,000 could be precious dollars. I don't medically have any idea because I’m not a medical person. I’m just a guy who’s lived a long time and watched a lot of this stuff. It would not surprise me to learn six months from now that they find what is actually wrong and that it is not this diagnosis, based on just having walked through this with so many people. They haven’t come down and said this is what it is. They’ve just ruled out a bunch of stuff that leaves this on the table. That turns into a diagnosis. That’s not a diagnosis. It’s just the last thing on the table that they’ve thought of. I’m sorry. I’m not done with this yet if I’m you guys. And you need that money to make the trip to Mayo or X or Y place and find the specialist in a different city or whatever you’ve got to do. That’s more important than paying off your house at this point.

Let’s play this through positively. Positively, they find it and your prayer and my prayer is right and it’s something that can be treated and he’s okay. As soon as that happens and we know the road we’re on, we pay off the house. If I’m wrong and the doctor’s worst fears come true, you’ve got $500,000, two years from now you’re 59 years old, you can pay off your home easily, and you’re going to be fine financially. But we don’t have to make that decision today, and we don’t have to put yourself where you have no cash except retirement today. You can be debt-free anytime you want to be. But today is not a good time to cash out retirement because you’re not 59.5, and today’s not a good day to use your last bit of cash that you’ve got with all this uncertainty around you.

Two years from now, you will have one of two outcomes. You will have had this horrible diagnosis come true and you’ll be fighting this deal on your own, and we’ll use the money in retirement without any penalty at all to pay off your home, and you’ll be just fine. You’ve got plenty of money. You’re okay. That’s your worst case scenario financially speaking. Medically speaking, too, I guess.