Is It Best To Pay Off Your Mortgage Before You Retire?

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Is It Best To Pay Off Your Mortgage Before You
Retire?
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• It is often thought of as being a big financial
  achievement to pay off your home mortgage before
  you retire, but in many cases, you can still
  retire in comfort without having paid off all
  your housing debt. With some low mortgage
  interest rates, it can be a more sensible
  financial decision to carry on making the
  payments once youve retired, and here are a few
  other examples of when it might make good sense
  to keep your mortgage into retirement

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• If your investments earn you more than what you
  pay on your mortgage
• Its always important to consider this carefully
  and to have a professional mortgage broker help
  you with the calculations, but if your investment
  portfolio is earning you more than what youre
  paying as interest on your mortgage, then you
  could still be ahead with your finances if you
  continue with the payments into retirement.

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• If paying off your mortgage would involve using
  your savings
• Your savings are an important part of your
  retirement, and it simply makes no sense to use
  them up to pay off your mortgage and be left with
  next to nothing to enjoy your retirement with. If
  you have money set aside for emergencies, and can
  live comfortably from other earnings, then thats
  of course a different story. However, all it
  takes is for one emergency expense, such as a new
  roof or car, and you could be forced to take on a
  higher interest debt which would cancel out the
  benefit of having paid off your mortgage.

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• You have other debts with a high rate of
  interest
• If you have more than one debt, it would make
  good financial sense to pay off the one with the
  highest rate before you prioritize your low rate
  mortgage.
• If you save elsewhere, you might qualify for a
  tax deduction
• Taxes should always be at the forefront of your
  mind when making financial decisions, especially
  with the recent changes to mortgage interest tax
  deduction. You may no longer be able to deduct
  mortgage interest due to the increased standard
  deduction, and if you dont have enough
  deductions, you cant itemize. That said, you
  might qualify for a tax deduction if you add
  money to your retirement accounts.

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• It might also be worth considering whether your
  decision to pay off your mortgage when you
  retire, is one that youre making to give
  yourself peace of mind, in which case it might
  not necessarily be the most financially sound
  one. Going into retirement with debt is probably
  not a nice thought for anyone, but its important
  to try and think logically about your decision,
  to avoid losing out. If in doubt, speak to your
  mortgage broker or a financial advisor who can
  help you to figure out what makes the most
  financial sense for you and your circumstances.

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