Your retirement is closing in but, with the kind of economy that we have now, you are not yet so sure if you should still pay off your mortgage in the next five years.
As 40% of your retirement savings have already suffered, you can only hope that the stock market will recoil so you will be able to recover what you have lost.
Can you actually afford to still pay off your mortgage before your retirement?
Find out more about the two reasons why it is best to pay mortgage and clear off your debt in 2009.
But before I get into that there are two caveats that you must consider before paying off your mortgage.
If you have high credit card debt to pay, make this a priority in 2009. Credit card interest rates are high and sometimes around 30%. It makes much more sense to pay off your credit card debt first before you choose to pay off your mortgage. There is one exception and I will discuss this later.
See to it that you are making regular 401(k) or retirement savings contributions. The fact that the stock market is not faring well during the past eight months is not an unknown fact. It is understandable that you may find it impractical to regularly invest in the stock market. However, continuing to make the minimum contributions would still be the best way to get ready for your retirement while you are waiting to the market to rebound and restore your savings.
If you have completed these steps, then getting your mortgage all paid off before your retirement is the best financial tactic you achieve starting in 2009.
The thought of spending your retirement funds on maintenance costs and property tax and not for paying off your monthly mortgage bill should be enough to get you motivated to own your home free and clear before you retire.
Having your mortgage all paid off when you retire gives you the option of accessing your funds by means of reverse mortgage.
With a reverse mortgage, you will be able to make use of your home equity and turn your home as a source of income when you retire. However, you may only enjoy this benefit if you have your mortgage account almost paid off fully.
You would think that you will be paying off your mortgage out of your hard-earned money but this should not be the case.
There is a new technique called mortgage acceleration that will help you pay off your mortgage faster without changing your lifestyle. This technique can help you slash at least 13 years off your mortgage and save thousands of dollars of interest.
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