Director | Certified Financial Planner | Aged Care Professional
“The happiest retirees are those who enjoy their retirement with the utmost peace of mind.”
Ideally, this is supposed to be the case. However, studies have shown a remarkable increase in the number of Australians aged 60 and over who are still paying their mortgages. And by such, the peace of mind that retirees are seeking is not achieved.
This may be due to a number other reasons but it will eventually affect the plans they have for their retirement. Since they no longer receive a regular wage, being still tied up paying for their mortgage will create a stressful situation that they had never anticipated to be in.
How can retirees do to avoid this situation?
- Downsizing your home – Consider to downsize your large home into something that is practical and suitable for you and your spouse. Bigger homes mean bigger maintenance so opting to downsize can help you manage your costs in retirement. Seek Professional help or consult a Financial Adviser to assist you with this decision.
- Pay off your Mortgage while you are still working – Set aside a budget from your regular income to pay off your mortgage and manage your cash flow so that you won’t have to tap into your retirement savings. Keep a checklist of priority expenses and only spend for necessary things. This is the “Basic Need versus Want” strategy.
- Add additional repayments into your scheduled mortgage payments – If you already have an existing mortgage and you are eyeing to finish paying it off just before you retire, then increase the repayments for your mortgage. By doing this, it will benefit you in the long run by paying it down earlier. Making minimum payments is fine but doubling or adding more to it will fast track you to a debt-free retirement.
As they say, you are the captain of your ship and it is up to you how well you navigate away from storms. However, it is always recommended to seek help and Professional advice.
For more in-depth discussion about this topic or if you have more questions, please visit our website www.verante.com.au