To avoid unnecessary financial burdens, “take stock of your situation and create a plan to reduce debt as you approach retirement. In some cases, paying down debt might mean delaying full retirement,” says Setzfand.
Many experts still recommend owning one’s home before or at retirement.
“During the 2008 financial crisis, clients with a free and clear home tended to sleep better than those who still had a mortgage,” says Brian Fricke, a certified financial planner (CFP) and author of "Worry Free Retirement."
If you retire holding a mortgage, ensure that you can afford the utilities, maintenance, and insurance payments that also come with owning property, says Setzfand.
Also, consider downsizing to a smaller home; paying down mortgage principal and refinancing the remaining portion to reduce your monthly mortgage payments; and weighing the tax benefits against a complete pay down.
This one is a must for everyone.
“Retirement planning is particularly hard because the implications of your choices tend to get magnified,” says Jason Branning, CFP, and owner of Branning Wealth Management.
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