Lucky are those at retirement age that have their home paid up in full. This helps the retiree achieve peace of mind and a new future to look forward to. But for those who still have a balance with their mortgage company, their dream of living free of debt at retirement could be only a pipe dream.
The Consumer Financial Protection Bureau maintains statistics and one of these statistics record the number of people who have not paid off their mortgage by retirement age. In 2011, 30% of property owners who reached 65 still owed payments on their mortgage. This is an eight point rise from 22% in 2001. Senior citizens also saw an increase in mortgage debt by 82%, from $43,000 to $79,000 on average.
The effects of this are many. Seniors who were expecting a comfortable life at retirement find themselves stagnated from doing things like traveling or going to visit their children in another state because they still have to pay their mortgage. As a result, even with social security income, they find they are held back from doing these fun adventures since their mortgage payment takes a large chunk out of their monthly income.
How to Pay Off Your Mortgage Before Retiring
Some experts in the financial field suggest to their clients to try to pay off their mortgages before they retire, by doubling up on payments or paying more towards the principal balance. One way to begin would be to implement a financial plan to see how much you can afford to pay above and beyond the standard mortgage payment.
There are loads of mortgages calculators on the Internet that can help you or you can speak to your financial advisor. If you don’t have a financial advisor, anyone who is in the field of finance should be able to assist you.
As far as where the additional money would come from, budgeting is always an option but you may also want to consider possible lowering your monthly retirement income and use that money to pay towards the mortgage.
Before you do anything, however, always speak to a financial expert before taking the plunge.
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