Less House, More Home: Mortgage-Free Before Retirement

Having a Mortgage in Retirement: Everything You Need to Know

The last thing you want to think about when you consider retirement is the hassle of a mortgage. It can be both financially and mentally exhausting. Fortunately, there are a few solutions to ensure your new journey is seamless and stress-free. Many post-retirement options such as continuing care communities, offer an adequate solution that allows you to enjoy leisurely activities with less worry. You deserve to relax in luxury after retirement, and a mortgage can put a strain on your finances and peace of mind. Continue reading to discover the best and most opportune times to eliminate your mortgage in retirement and begin your new journey to freedom and independence.

Making Sense of Your Retirement Plan

Before you begin working on eliminating your mortgage, you should first determine and make sense of your retirement plan. It’s important to understand what your upcoming and long-term health costs will be, what your retirement income will consist of, and how it will impact your lifestyle in order to make an informed decision on your mortgage. 

With healthcare costs on the rise, it is imperative to plan for those unexpected medical expenses in retirement. Make sure that you understand the numbers while keeping inflation in mind. You want to properly estimate your future healthcare costs by taking into account both current and future medical requirements. By considering these factors and applying them to your plan, you will be able to effectively plan your retirement without having to worry about unexpected expenses.

What can you do to prepare for rising healthcare costs? You can learn how to prepare for retirement by reading our blog.

Having determined your healthcare costs, you will need to determine the amount of income you will receive on a state and federal level. If you have any assets such as a 401k or other retirement funds, it is important to keep track of them. Once you’ve determined your income you can look at how these numbers will affect your current lifestyle. If you want to continue living an opulent lifestyle, eliminating your mortgage in retirement may be the perfect solution for your transition into your new lifestyle.

When Should You Pay Off Your Mortgage?

Your ability to pay off your mortgage depends on how well you are prepared for retirement. If you are ahead of the game with your planning, eliminating your mortgage before you become dependent on your IRA can be a wise decision. In planning for your retirement, it is important to consider how you intend to repay your mortgage. More than likely, you will be using your savings, so the timing will depend heavily on your available funds. If you withdraw from your IRS account, for example, you may have to pay large taxes, leaving you with a much smaller sum. You should also consider hiring a financial advisor to guide you through payments and interest to make the most informed decision possible.

Related: Is Independent Senior Living Right for Me?

3 Tips for Eliminating Your Mortgage in Retirement

Now that you know the benefits of eliminating your mortgage in retirement, let’s discuss the various methods available to you. These are the top three ways in which you can pay off your mortgage and begin your retirement planning.

1. Refinance Your Loan

Refinancing your loan may allow you to qualify for a shorter loan term. By doing so, you will be able to pay it off within a shorter period of time and adjust your interest rate. As a result, your monthly payments will be higher, but you will pay off your loan more quickly. Speak with a credible lender about your chances of pre-approval and ensure that you can afford your new rate.

2. Additional Payments

As with refinancing, you can make bi-weekly payments instead of monthly payments to expedite the process. Therefore, you will be able to knock off a few years and potentially save money on interest.

3. Recast Your Mortgage

By recasting your mortgage payments, you are able to contribute a lump sum to your principal balance. Coupled with the previous tip, you can get your mortgage paid off even faster, enabling you to enjoy your retirement and be prepared to pay for any long-term medical needs.

Benefits of Less House and More Home

In retirement, eliminating your mortgage can provide many benefits, including peace of mind. As a result, you will be able to increase your cash flow and save a great deal of interest. Less house, more home refers to the carefree lifestyle that can be enjoyed following retirement in a community without having to worry about mortgage payments or home maintenance.

There are several benefits to downsizing while maintaining the comfort of community and independence. One of these benefits is the ability to live in a spacious environment with less responsibility. At Seafields at Kiawah Island, for example, the highly qualified staff takes care of housekeeping as well as laundry for its residents. As a result, members of the community are able to devote their time to activities that are more meaningful to them, such as pursuing hobbies they enjoy or simply relaxing in luxury after many years of hard work.

For residents of Seafields, many opulent amenities make life after retirement a breeze. Find out what a day at Seafields is like as well as an in-depth look at the lock-and-leave lifestyle by reading our blog.

Jumpstart Your Retirement Journey at Seafields 

Upon retiring, the only thing you should be concerned about is enjoying your leisure time–– and eliminating your mortgage in retirement can allow you to do just that! There are so many options that allow you to fully embrace the “less house, more home” lifestyle including joining our community here at Seafields at Kiawah Island. 

We at Seafields provide our residents with the opportunity to leave maintenance in the hands of our highly trained staff while you go out on the town and bask in the breathtaking views Kiawah Island provides. Our Life Plan community offers 90 independent living residences, fosters independence, and delivers a variety of planned events to suit the needs of all residents. In addition to housekeeping services, Seafields features ample paths and trails for exploration and state-of-the-art amenities that promote health and wellness. If this sounds like the perfect retirement oasis for you, contact us by clicking the button below. We can’t wait to hear from you!