I’m 64, earning $1,500 a month driving an Uber and getting almost $5,000 a month in pension and Social Security – should I pay off my mortgage before I retire?


I am 64 years old and about to retire in a year. I owe about $165,000 for my house with no other debt. I have almost $850,000 in retirement savings, $2,200 a month from alimony, about $2,300 a month in Social Security benefits, and $300 a month from my ex-wife’s alimony. I also drive an Uber for about $1,500 a month.

Is it reasonable to pay off my house when I retire?

See: I’m 67 years old and retired with $57,000 left in my mortgage and $600,000 saved for retirement – ​​should I pay off my home now?

Dear reader,

You ask one of the most common questions we get at MarketWatch about saving and spending in retirement – ​​whether it makes sense to pay off your mortgage before retirement.

The answer is, as you might suspect: it depends. This situation is highly personal to the individual. Some people have absolutely no problem retiring with a mortgage, while others are stressed out at the idea of ​​this debt when they leave the workforce.

What you need to do before you can answer this question is to jot down any expenses you anticipate you’ll have in retirement, and add a little contingency for what you don’t expect. (You should aim to have an easily accessible emergency savings fund in the event of an emergency…perhaps six months will suffice, although some retirees would prefer to be more cautious and have the option to pay for it. a year’s worth of bank accounts.) When to list your expenses, including everything – big bills, like mortgage, taxes, utilities, groceries, gas, medical needs as well as smaller, more flexible expenses, such as vacations, gifts for loved ones, hobbies, entertainment, TV and magazine subscriptions, pet care, etc.

See how your expenses compare to your income, but don’t include your Uber earnings (or any other income you may have). How do you feel about it? Is it too tight? Enough? That can help you decide if you want that mortgage payment on the list.

Also see: I have a $250,000 mortgage, 24 years left on the loan. Should I sell stocks to pay off my mortgage before retiring in a few years?

Also, determine if paying ahead of time requires you to keep working a little longer and whether you want to do so. You may not want to use your $850,000 to pay off your mortgage, as that would leave you with less than $700,000. You should have as much retirement savings as possible before you retire. It sounds cliché, but advisors aren’t wrong when they say you can borrow to buy a home or study, not to retire. On the other hand, if you keep paying your mortgage for the next few years, and even pay a little more principal when you can, you’ll eventually get your “bonus” when you’re retired and you have all the money you need. chief. that excess.

This only works if you can afford to pay your mortgage in retirement and you feel comfortable doing so. If the thought of having this bill before retirement when you’ve lost a portion of your income stresses you out and can even keep you up at night, it won’t do you any good. In that case, I recommend trying to strike some sort of balance and contacting a qualified financial planner to help you dig into the details of your financial plan and get you on board. arrange it.

Readers: Do you have suggestions for this reader? Add them in the comments below.

Have a question about your own retirement savings? Email us at the address [email protected]


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