Boomers: Should you pay off your house before you retire?
Good question. You are getting ready to retire in a few years. You have a fairly nice house, accompanied by a fairly large mortgage. Should you pay it off?
For: Paying it off will give you more money to spend in retirement. You will have money sitting around and available if you sell your house, which you’ll probably do eventually anyway. And houses traditionally increase in value over the long term, so you will receive more than if you had put the money in the market.
Against: Housing prices are going down. Who knows what your house will be worth when you want to sell it, and you might not get full value, which means you could have used that money in the market for a better return.
Another factor to consider is whether you are using pre-tax money to pay off the mortgage. Probably not a smart thing to do. Here is one opinion from InRich.com.
I guess the decision depends on:
A. Your estimation of housing prices at the time you want to sell.
B. Your need for keeping your monthly expenses low.
I don’t know the tax benefits/drawbacks involved. If anyone knows, share with the rest of us, please.
Tags: baby boomers, housing values, retirement planningRelated Stories
POSTED IN: Boomers nearing retirement, Finance
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