Should You Pay off Your Mortgage in Retirement?

Everyone has different circumstances when it comes to buying a home to call their own. Understanding these implications doesn’t just stop at the time of purchase, you need to consider these variables throughout the entirety of your mortgage.

One of the biggest things to decide is whether to pay off a mortgage in retirement. This is not a cut-and-dry answer for everyone, and you will need to get to know the details that will help you make your decision.

The tips below will help you when you’d like to pay off your mortgage on your terms.

Should You Pay Off Your Mortgage in Retirement?

Many financial advisors can explain in detail why you should never pay off your mortgage in retirement, but others may show you why it can be helpful to you. Every situation is different, so you need to know your personal circumstances.

Here are some of the main things that you should consider:

1. Consider Your Current Cash Flow

Without question, doing your own research is the most important step you can take when you’re considering what to do with your mortgage. If you need more cash flow in your life, paying off your mortgage will definitely free some up.

It reduces the obligations and overhead costs that you have and also takes away one of life’s biggest stressors. You will go to sleep at night knowing that you have money in the bank and that no one can take your home from you.

2. Think About How Much You Have Stashed Aside for Retirement

In most cases, it doesn’t make sense to dip into your retirement account to pay off your home. If you have spent years stashing away money in your 401k or Roth Individual Retirement Account (IRA), you don’t want to blow it all just to break even with your home.

However, if you have more than enough set aside for retirement and just a little bit left to pay on your mortgage, this might be something to consider depending on the tax implications that you’re dealing with.

3. Speak to a Financial Advisor Before Making a Decision

The main thing you need to do is speak to a financial advisor that can help you out. They will assist you in making sure that you are doing what is best for your personal circumstances.

For instance, someone that has too much home that they’re looking to downsize will have a different set of circumstances than someone who plans to live the rest of their lives in their house. Financial advisors also understand the current state of the real estate market and can give you an idea of how solid your retirement savings are.

Make the Best Decisions for Your Finances and Retirement

If you are weighing whether or not to pay off your mortgage in retirement, the tips in this article will be useful to you. Be sure that you get the assistance of financial advisors that can steer you toward the right decisions.

We’d be happy to assist you further.

Solidify Mortgage Advisors would be happy to help you out with any decisions that you are thinking about making. Take time out to contact us on our site, or call us up at (858)292-9960.