I am 64 and getting ready to retire in a year. I am thankful to you About $165,000 on my house with no other debt. I have about $850,000 in retirement savings, $2,200 a month in pension, about $2300 a month in Social Security benefits and $300 a month in my ex-wife’s pension. I also drive for Uber for about $1,500 a month.
Does It Make Sense To Pay Off My House When I Retire?
I’m 67 years old with $57,000 left on my mortgage and $600,000 saved for retirement – should I pay off my house now?
You ask one of the most common questions we get on MarketWatch about retirement savings and spending — if it makes sense to pay off a mortgage before retirement.
The answer is, as you might suspect: It depends. This position is highly individual to the individual. Some people have absolutely no problem entering retirement with a mortgage, while others balk at the idea of this loan when they have left the workforce.
What you need to do before you can answer this question is figure out every single expense you anticipate you’ll have in retirement, and add a little extra cushion for those you don’t anticipate. (You should aim to have an emergency savings fund that is easily accessible in an emergency… maybe six months’ worth of expenses, although some retirees prefer to be extra cautious and keep a full year’s worth of money in a bank account.) .) When listing your expenses, include everything — big bills, like your mortgage, taxes, utilities, groceries, gas for the car, medical needs, as well as smaller, more flexible expenses, like vacations, Gifts for loved ones, hobbies, entertainment, television and magazine subscriptions, pet care, and so on.
See how your expenses compare to your income, but don’t include your Uber earnings (or any other earnings you have). How do you feel about it? Is it too tight? more than enough? This can help you decide if you want to be included in the mortgage payment list.
as well I have a $250,000 mortgage with 24 years left on the loan. Should I be selling stocks to pay off my mortgage before I retire in a few years?
Also determine whether it will require you to continue working a little longer in order to pay it forward, and if you are interested in doing so. You probably don’t want to tap into your $850,000 to pay off the mortgage, as this will leave you with less than $700,000. You should have as much as possible in retirement savings before you retire. It may sound cliché, but advisors are not wrong when they say that you can borrow for a home or education but not your retirement. On the other hand, if you continue paying off your mortgage for the next few years, and spend a little extra on the principal when you can, you’ll end up with “bonus” money when you’re already retired. Done and all you have is that extra cash.
This only works if you can financially commit to retirement, and you’re emotionally comfortable doing so. If the thought of this bill going into retirement with some reduction in your income causes you some stress, and maybe even keeps you up at night, then it’s not going to do you any good. In that instance, I would suggest that you try to do some sort of balancing act and reach out to a qualified financial planner to help you dig into the details of your financial plan and help you sort it out.
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