The third question in the quiz was, “When will your mortgage
be paid off, if you have one?”
Again, great if you know the answer. Many of us do not, and this can lead to
trouble. The date of your last mortgage
payment becomes important as you draw near to retirement. If you still have to make mortgage payments
in retirement, your monthly income will have to be higher than if you do not.
Alternatively, your plan may be to downsize, which is a good idea. However, with more people aging, the price of
smaller homes may be more than the equity in your current home. Rather than
downsizing, you could spend a little money and renovate your current home to
include a suite. This would help with mortgage
payments in retirement.
Many of us get caught in the trap of extending the
amortization in order to have lower payments.
Other people believe that we should not pay off the mortgage, but use
the equity for other investments.
Whatever your opinion, know where the end is so you can plan
for retirement. Look forward to the date
when you can burn that mortgage!
