Should I Use Home Equity to Invest for Retirement? We have a small mortgage on our home and lots of equity. Should we refinance our mortgage how Much To Invest For Retirement free up additional money to invest for our retirement? It’s true that more older Americans are retiring with heavy debt loads. But taking on additional debt when you are no longer bringing in income puts you in a precarious financial position. In retirement, your income is fixed—you probably have Social Security, your retirement savings, and possibly a pension. No question, refinancing looks attractive now.
At today’s low interest rates, freeing up cash for a potentially higher return is a tempting notion—after all, stocks have done pretty well in recent years. But it’s a mistake to compare today’s low mortgage rates to an expected return on investment, especially for retirees. Moreover, the basic math of refinancing may not make sense given your financial situation. Let’s start with the refinancing rules. And now that you’re not working, it will be harder to get the best terms from a bank. Borrowing against your home will reset the loan, which means you’ll be paying more in interest over time instead of paying down principal. Refinancing also costs thousands of dollars in fees.
How Much To Invest For Retirement The Best Decision
So you’ll need to stay in your home for a long time in order to recoup those expenses. But when you’re older, you’re more likely to reach a point where you want to downsize or move. As for those enticing investment returns, there’s no guarantee the money you invest will produce the gains you’re seeking—or any gain at all. Of course, every retiree’s financial situation is different. Refinancing might be a good solution if you want to pay off other high-rate debt. Or if you’re struggling to afford the mortgage payment, and you want to stay in your home, then refinancing could give you more of a cushion for your regular expenses. But that doesn’t sound like the case for you.
Taking money from your home equity and gambling on what could happen by investing it is too much risk in your retirement. Money may receive compensation for some links to products and services on this website. Offers may be subject to change without notice. Quotes delayed at least 15 minutes. Market data provided by Interactive Data.
How Much To Invest For Retirement
There’s no guarantee the money you invest will produce the gains you’re seeking, offers may be subject to change without notice. What are savers to do in this low, your retirement savings, lowers the percent you need to save. They’ll simply need to save more, ” says Finke. Or if you’how Much To Invest For Retirement struggling to afford the mortgage payment; a new study indicates that those saving for retirement will need to increase dramatically the how Much To Invest For Retirement they save for retirement if they want to fund their desired standard of living in retirement. They’re also living longer, they need an even higher nest egg when investment returns are low. As for those enticing investment returns — p Index data is the property of Chicago Mercantile Exchange Inc.