When you are preparing for retirement, you have a lot of choices that you need to make in order to get things right. One of the biggest decisions you have to make is whether or not you want to pay off your home. And, while there can be arguments made in either direction, it is generally a good idea to get your mortgage paid off before you go so you can have more financial freedom in retirement.
Increase Your Cash Flow
One of the most difficult things for many people in retirement is ensuring that they have enough cash flow to allow them to lead the life they want to live. If you are retiring with a mortgage, it is just another thing that will get in the way of your potential to be financially comfortable. And, without a mortgage, you can feel much more comfortable living your life. People tend to live longer now than they did before, so retirement funding doesn’t go as far as it used to in the past. Without your mortgage, you can get more out of your retirement.
Leave Wealth to Your Heirs
When you have a mortgage, you don’t really have as much money available to leave to your heirs when you pass. But with your home paid off, you have more discretionary money and more that you can leave to your kids and other loved ones. When your home is paid off, it also makes it easier to leave the home itself to your loved ones. Some heirs that inherit homes are forced to refinance by the bank. If you can pay off your home beforehand, it will be a lot easier to leave your children something that they can benefit from.
Decrease the Interest You Pay
The other benefit of paying off your mortgage before retirement is that when you pay off your mortgage early, you can decrease the amount of interest you have to pay. This means that over the course of your home loan, you will spend less money on your house. Having your mortgage paid off as early as you can, especially before retiring, can make a huge difference in your life and your financial situation.
Preparing for retirement takes a decent amount of work, but you can start as early as you’d like. And, making the effort to pay off your mortgage before you retire can take the stress off of you in retirement. All you have to do is make regular steps now to make sure that your mortgage is no longer an issue after you retire.
Check out this article on how to fulfill your vision for a fixer-upper home!