Why do you need to be mortgage-free in retirement? To take the financial stress out of not earning a paycheck. Capital Budget Strategies, LLC, Austin’s best money coach and financial advisor, can help you enjoy your retirement to the fullest, buy getting financially organized!
Retirement.
Just saying the word brings a smile. But before you start dreaming of travel, sleeping late and taking the dog on long walks every day, better pay off that mortgage.
In retirement, most people live off their savings. They follow the common financial advice of taking 3 – 4% of your money out of your retirement savings the first year, then annually increase that amount by the “cost of living” index.
Problem is, many people are living longer and longer. My wonderful aunt passed away last year at 106. Will your retirement savings last as long as you do?
The best way to reduce your costs in retirement is to pay off your mortgage before you leave your office (or cubicle or We Work space) for the last time. If you are paying a mortgage of $950 a month now, you’ll be paying $950 a month in retirement. That is $950 more dollars coming out of your retirement nest egg each month. That adds up to $11,400 per year. Yikes!
The second hit will be in the taxes you will pay when taking money out of your IRA or 401(k). If you have to take an additional $950 per month, you will be paying the extra tax on $950. Finally, there is always the chance that the “extra” $11,400 you take out may put you into a higher tax bracket. In retirement, every penny counts!
How to pay off the mortgage?
1. One idea is to cut back on retirement savings. Yes I said that. If you have an employee who matches your retirement savings, put in just enough to take advantage of his or her generosity, then plow everything else into your mortgage.
2. Get a part-time job and dedicate all your earnings to the mortgage.
3. Have an extra bedroom? Consider Airbnb. Our friends in Austin do this on a regular basis and do it well. During SXSW, they earn several thousand dollars in two weeks.
Come on Austin, get creative. This is your retirement we are talking about.
Capital Budget Strategies, LLC, Austin’s best Money Coach and Financial Advisor, will help you organize your finances and set you on the path to financial independence.
For only $149, we will work with you to determine your Net Worth, set up an Emergency Fund, create a Monthly Budget and build a Snowball Debt Reduction Plan.
Give us a few hours in your office, your home or some other quiet place and we will guide you through all the steps in our 2018 Financial Workbook. We can meet you during the day, in the evening or on the weekend.
Capital Budget Strategies, LLC is in the financial education business, we do not sell any financial instruments, work on commission or recommend investments.
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