You planned on paying off your mortgage in the next five years, that is before you retire, but the markets current state is holding you back.
As 40% of your retirement savings have already suffered, you can only hope that the stock market will recoil so you will be able to recover what you have lost.
Do you really need to pay off your mortgage in advance before you retire?
You need to know two reasons why you need to get rid of your credits and pay off your mortgage in advance this year 2009.
You should, however, take these two precautions before you go and get your mortgage paid off.
If you have high credit card debt to pay, make this a priority in 2009. Credit card interest rates are high and sometimes around 30%. It makes much more sense to pay off your credit card debt first before you choose to pay off your mortgage. There is one exception and I will discuss this later.
See to it that you are making regular 401(k) or retirement savings contributions. The fact that the stock market is not faring well during the past eight months is not an unknown fact. It is understandable that you may find it impractical to regularly invest in the stock market. However, continuing to make the minimum contributions would still be the best way to get ready for your retirement while you are waiting to the market to rebound and restore your savings.
The move to pay off your mortgage when you have done all these will be the most appropriate step to take before you retire. And it is even better if you take action this year.
Living in your own home after you retire allows you to enjoy the fruit of your labor. You only have to spend your retirement benefits on property tax and maintenance cost. That hateful mortgage bill will no longer tear a hole in your retirement savings.
Having your mortgage all paid off when you retire gives you the option of accessing your funds by means of reverse mortgage.
A reverse mortgage gives you the ability to tap into your home equity only if your mortgage is almost fully paid off. This gives you the advantage of using your home as a second income source in the event you need this in retirement.
You would think that you will be paying off your mortgage out of your hard-earned money but this should not be the case.
There is a new technique called mortgage acceleration that will help you pay off your mortgage faster without changing your lifestyle. This technique can help you slash at least 13 years off your mortgage and save thousands of dollars of interest.