Retirement

Lose Your Mortgage Before You Retire

Finance

You may look forward to your retirement, but most retirees face less than perfect lives what with their mortgages still hounding them. In 2016, 60-year-olds and older Americans borrowed as much as $2.84 trillion for their homes, and many of them continue to pay their loans well into retirement.

Some authorities may argue that housing debt in retirement can be a good thing, but it will remain as the single biggest expense you have. You can have a debt-free retirement, however, by following one of three ways.

Pay Down the Loan

Now, you probably already know one way how to retire without a mortgage: you simply have to pay off your loan before you retire.

No matter what age you are, no matter what mortgage rates you have in your Ogden mortgage, you can pay off your home loan quicker if you add in extra payments every month, semi-annually, or annually. Alternately, you can also pay any cash bonuses you receive towards your loan.

Downsize the House

The second way to retire without a mortgage involves downsizing. Downsizing can work perfectly for couples whose children are already grown-ups. You can sell your current home for a much smaller one you can happily live in, and the profits can go towards your home loan.

You can also downsize even if you still have children at home.

Refinance the Mortgage Terms

Thirdly and finally, you can refinance. Refinancing makes sense if your credit score went up or current interest rates became more favorable. When you refinance, however, choose a 15-year mortgage that you can pay off by the time you retire.

You also end up with more savings in the long run, and you can even combine this with the first suggested method: refinance then pay down the loan.

You can easily retire debt-free with any of the three methods above, and they will work best if you start on them early enough. Come retirement, you can relax and give no thought to your housing loan expense.

Retirement Preparation Measures to Do Now

Lifestyle

Old man sitting on a log smilingAs you near the age of retirement, you start thinking about the most comfortable way to maintain your lifestyle. Even if things have to change, you want to keep your independence as long as possible and have enough money to cover your growing medical bills.

Here are three preparation measures to consider:

Reverse Mortgage

Those who are 62 years and older may qualify for reverse mortgage programs to get an amount that they can use to augment their finances in old age. You have the option to get the money through a line of credit, as a lump sum, or as regular payments. HUD backs this kind of mortgage so that when the time for repayment comes, the borrower will not have to pay for more than the fair value of the house on the market. What remains of the mortgage will be shouldered by HUD.

Retirement Home

A lot of things have to be considered when choosing your home in your old age. Though you can stay in the house you’ve lived your whole life; some changes may be necessary to prevent common problems faced by people in old age, such as trips and falls. A retirement home is an ideal place for you to move into because the facility is designed to address the needs of the elderly. They also offer the assistance you might need, and they have an in-house physician to check your health regularly.

Funeral Plan

The taboo surrounding early preparations for one’s death is slowly being lifted, and the earlier you prepare, the more you will be saving in the long run. Funeral arrangement prices keep increasing because of the limited plots of land available, which means the plan you get now might cost significantly more if you only start paying for it in the next decade.

There are several reasons to prepare for old age as early as now. The biggest reason is that you want to be able to make sound decisions and keep your worries to a minimum in the future.