should i pay off my mortgage before retirement or invest

Should I pay off my mortgage before retirement or invest?

When it comes to managing your mortgage as part of retirement planning, the general recommendation is to pay off your mortgage before retirement. This helps reduce expenses and eliminate debt, which will provide peace of mind in your later years.

However, if you are lucky enough to have a very low interest rate, it may be worth considering an alternative strategy: investing the money you would use to pay off the mortgage. This approach is only effective if the returns on your investments exceed the mortgage interest rate, and it’s crucial that you don’t spend the difference. The goal is to leverage the low interest rate to potentially grow your wealth.

Additionally, changes in tax laws, such as higher standard deductions, mean that the tax benefits of mortgage interest deductions may no longer be as advantageous for many homeowners. For these reasons, paying off your mortgage is often the safest route, but in certain situations, investing the mortgage payment can be a viable option.

Click here to schedule a consultation with one of our financial advisors.

Shawna Theriault, CFP®, CPA, CDFA®
Senior Financial Advisor, Wiser Wealth Management

Listen to Our Podcast:

learn-more-2024

Categories

Recent posts

  • should i pay off my mortgage before retirement or invest
  • Can saving money become addictive?

Share This Story, Choose Your Platform!

Wiser Wealth Management, Inc (“Wiser Wealth”) is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). As a registered investment adviser, Wiser Wealth and its employees are subject to various rules, filings, and requirements. You can visit the SEC’s website here to obtain further information on our firm or investment adviser’s registration.

Wiser Wealth’s website provides general information regarding our business along with access to additional investment related information, various financial calculators, and external / third party links. Material presented on this website is believed to be from reliable sources and is meant for informational purposes only. Wiser Wealth does not endorse or accept responsibility for the content of any third-party website and is not affiliated with any third-party website or social media page. Wiser Wealth does not expressly or implicitly adopt or endorse any of the expressions, opinions or content posted by third party websites or on social media pages. While Wiser Wealth uses reasonable efforts to obtain information from sources it believes to be reliable, we make no representation that the information or opinions contained in our publications are accurate, reliable, or complete.

To the extent that you utilize any financial calculators or links in our website, you acknowledge and understand that the information provided to you should not be construed as personal investment advice from Wiser Wealth or any of its investment professionals. Advice provided by Wiser Wealth is given only within the context of our contractual agreement with the client. Wiser Wealth does not offer legal, accounting or tax advice. Consult your own attorney, accountant, and other professionals for these services.

Sign up for our newsletter!

Our latest blogs, podcasts, and educational videos delivered to your inbox weekly.