Mortgages, Money, and Interest…. Oh My!

Planning to save big after retirement? Then here’s a wise tip –

Pay off your mortgage and save a million!

No, scratch that and ask yourself –

Do you pay off or do you invest for a longer time so that your money grows?

You know you’ll get peace of mind if you are absolutely debt-free. However, save these fizzy feelings for now and think clearly about your financial plans. Paying off your mortgage before or after your retirement rests entirely upon your individual condition.

The major player in your decision is your interest rate on the mortgage. If the rate is low, then most people do not pay the mortgage as they keep hold of their cash for diversifying their assets or liquidity.

So, what do you do?

See these factors below and then decide if you want to retire with the mortgage or not –

1. Check whether you are getting a limited or a reduced stream of income while retiring.

2. Invest wisely so that you get a substantial return. Often, market fluctuations reduce your investments and you suffer a loss.

3. Ready to diversify investments? Invest in a varied range of asset sectors like bonds and stocks.

4. Check your cash reserves. You have to make sure that paying off the entire mortgage won’t hamper your ability to maintain reserves.

[Note: If your mortgage suffers no prepayment penalty, then you can pay it off before retiring by paying down your principal amount.]