“Don’t be paying a mortgage with social security” is a quote from my father years ago.
After reading this, I have a few thoughts:
Going into retirement with debt and mortgage payments is a really bad idea. Its unfortunate that too many Americans find themselves in this position.
Sometimes it due to a job loss, divorce, or healthcare event that causes this. Other times its simply not saving enough or making an effort to pay down debt and save more. Fortunately, this can be fixed, even if you are in your 40s, 50s or even early 60’s.
Recently, I was with a refinance client in their 40’s/early 50’s and after the closing and they were lamenting they would never be able to retire and stop working as they had just taken out a new 30 year mortgage. They were just looking at the date on the note.
The next morning I ran their numbers and projected the amortization schedule with a small yearly home appreciation (3%) to see how much their projected equity would be. At age 62, they would have paid down their mortgage enough to get a Reverse Mortgage and eliminate a mortgage payment out of their retirement budget. I immediately communicated the good news to them. The conversation went a little like this:
“If you stay on the regular payment plan of your new mortgage, you should have enough home equity to put a reverse mortgage in place when you both reach age 62.”
Delivering great news to clients is just one of the many satisfying aspects of my profession.
Lesson is: No matter how late you are to the retirement planning, you should start. Even 10 or 15 years of planning will drastically improve your retirement.
For more information on how a reverse mortgage works, go to: My Reverse Mortgage information website
or you can contact me at 208-955-9080