Real Answers for Life’s Money Challenges
My husband and I are in our mid-70s and retired.
We had about $500,000 in retirement savings before the pandemic.
Our expenses before the pandemic were just covered by Social Security, pensions and our RMDs.
Sheltering in place, were saving money.
We are in reasonably good health and quite active in community and religious groups.
Unfortunately, we have a mortgage on our home with $175,000 still outstanding.
The mortgage is an ARM, with interest at 4.125% and a monthly mortgage payment of $1,457.
This was a refinance in October 2019.
Would it be wise for us to pay off our mortgage now?
For starters, youd be withdrawing more than 35% of your retirement balance in a single year.
Usually, its recommended that you limit withdrawals to no more than 4% or 5% annually.
And those taxes you mention could mean you have to withdraw even more.
Still, I understand why paying off your mortgage is appealing.
It buys you certainty at a volatile time.
But who knows what we can expect from the market while the threat of coronavirus looms over us?
Our team has compiled alist of creative waysyou can fatten your bank account this week.
This is a long list, so dont get overwhelmed.
Go ahead and start now, but be sure to bookmark this post so you could easily return later.
Well keep it updated as offers changes or expire.
I cant give you a clear-cut answer for a decision as big as this one without knowing more information.
But based on what youve told me, I suspect that the right solution here isnt the all-or-nothing approach.
Interest rates have dropped to record lows.
So even though you refinanced recently, talk to a loan officer about whetherrefinancing again could lower your payment.
You could also put the money youre saving while staying at home to knock out extra principal.
Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder.
Send your tricky money questions to[email protected].
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
