Planning with Parker: Mortgages in retirement (Financial Safari)
What's the best way to tackle your mortgage in retirement? Well, it depends. Here are some options.
and welcome back to Financial Safari and consumer advocates Steve Sadow and, of course, so with the Parker Holland, chief wealth strategist at Capital Financial. And this is called planning with Parker. Now let's talk about as obviously planning, planning for retirement Capital Financial. You again focus on that transition between the saving and the distribution on ultimate present preservation of that money. And where does the mortgage fit into? That used to be the day that you could see the TV shows with other burning the mortgage. How important is that? Mortgages aren't bad, especially with interest rates as low as they are in. A lot of people think they can't retire until mortgage is paid off. Okay, that's a huge misconception. Everything can be fit into a budget if it's if every other pieces of working together and what I love coaches heard him say before, God don't make a more land. That's a great hedge. And when you're paying a mortgage of 3% interest, it's fixed and you're earning 7% in a retirement account, er, an investment account that's always been the the argument we have to make math, verse, emotion and emotion normally always wins. So what we always focus on is personalized for each person we talked to is what is best for their emotional happiness versus financial happiness. And it is sometimes a very thin line, and we've talked before about good debt versus bad debt. So in the case of a mortgage with a low interest rate, if you don't have that much to pay off, that could be considered good debt, and it can. And you're leveraging the money. You're buying time, in essence, and that can actually greatly improve the retirement plan. But then, the vice verse of that, too, is a lot of people get to the last parts of the mortgage. Let's say when they only have a 10,000 left or Mawr, not drastic amounts. They're thinking of taking just wanting that lump sum, knowing they have the money there to knock it out. That could be a huge impact. I've seen this before. A person loaned themselves money from a 41 K to pay off a mortgage, paying off a loan with a loan. I mean it. You need to know how every moving part works, and that is a very important decision that needs to be discussed in another part of the discussion. That might be difficult. I think that times for you is if the house, if they've been in the house for 30 plus years, there may be things that need to happen to that house. And as we get a little older, the less apt we are. You want to do those things. And the other side of it, too, is lines of credit equity lines. People might not have a mortgage, but they have an equity line now, and I mean, that's still debt and they're doing it for house repairs because they've tackled the snowball of the mortgage. But now they're having to pay off that. I mean, you need to make sure what's right for you, because a lot of people forget. I mean, that house equity, that's an investment. That's a that's a tangible asset that can be used in your favor. And it just seems what's right for you, what state you're in, what tax laws are with the right all started. There's a lot of moving parts and that make and it may make sense at some point to decide. Well, I'm going to move to a more tax friendly state, and then the other part of it, too. I've heard a lot of questions recently about reverse mortgages. OK, good question. Can work. We're not saying is good or bad. Everything's case by case, but it could work. And a lot of people forget that when you have that property, if you're not looking at your marking it for the legacy for the kids, grandkids, whoever maybe it might be a great way to increase the retirement standard of living and by staying in the house and you can still be in the house, you and your spouse and you can still have full mobility, full access, pretty much full control. And but again, those air. Like you said, it's a case by case. This case, my good. It's not bad, but you've got to check it out exactly, and just pretty much like it comes to everything. It all depends on what's best for you and your plan. Sure, I appreciate how Parker addressed mortgages there, and this is just one of many topics that you address in your own box that these seven financial blind spots, what else do you speak of in there. Well, it's a Gigante. Let's talk about the mortgages concept, folks. Because, really, that's the biggest decision you made Your wife a lot of times is buying that house. And now another big decision is should you pay it off before you retire? No doubt my argument is no, not with interest rates as well as they are right now. Here's why. I don't recommend you pay your house off because a lot of times you want to take the money out of your 41 K your retirement plan to pay your house off. So now you're gonna owe taxes on that money and you may have a penalty if you're under 59 a half a 10% penalty. Plus, you're robbing your retirement plan. You might not. People retire on time. You talk about that and many other aspects in that seven financial blind spots books at box it DVD workbooks in there. And I'm gonna put together your very own retirement plan with the team as well as give you the box set for the next 10 people call right now You get that golden ticket. All right, folks, that number to call is 888910 80 to 65 8889108265 or you can text breeze to 21,000 b r E e z e to 21000