Paying off your mortgage eliminates
one of your biggest monthly bills and allows you to use your savings
for other expenses besides housing. The equity in your home could also
be tapped for extreme emergencies, via a second mortgage or reverse
mortgage. "If you pay off your house, that's a guaranteed return of 3 to
4 percent," says Stephen Curley, a certified financial planner and
director at Water Oak Advisors in Winter Park, Fla. "If you go into
retirement debt-free and owning your house outright and you are able to
take out 4 percent of your portfolio along with Social Security and meet
your retirement needs, that is the best-case scenario. And if you can't
stand the capital market, you should maybe buy a fixed immediate
annuity."
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