My client just turned 50 and is about nine years away from withdrawal eligibility? In nine years from now he can dip into his 401(k) retirement savings without incurring penalties or fees. His told me that he’s too old to risk money in the if you are 10 years away from retirement what should you do? Should you gamble a few more years and hope that the stock market goes up in time and you pull out before you lose your money or should you think about a strategy to get rid of debt. The choice is not the strategy that I’m referring to is specifically paying off your mortgage.
Now I know that there are arguments against not paying off your 203k loan texas mortgage early and investing all the surplus money you have in the stock market. In the long run the stock market return should out- perform savings you would get from paying off the mortgage is an extremely logical argument and depending on how long you have left to retirement, this may make sense for your financial we all know that investing in the stock market carry some form of risk and there could be another market crash by the time you the question is, are you willing to risk investing money and losing this especially in the years just before retirement?And what if you are able to pay off your mortgage before you retire. In retirement instead of using your retirement savings to pay for mortgage, you end up keeping all that money for yourself and saving thousands of dollars in the process would you do it?
One way of looking at an early mortgage payoff is that it is a risk-free investment. Once your mortgage debt is paid off, you don’t own the bank single penny after that. If the stock market falls and the real estate market crashes, this will have no impact on you unless you decide to sell your home. Now depending on whom you speak to, your financial advisors will probably defend this decision and will insist that there is far less risk investing in the stock market than you paying off your mortgage early. So here’s one question that you should always ask them. Will they guarantee that every dime you spend with them they will earn you a reasonable rate of return and if the stock market crashes that they will pay you back every cent?I doubt any financial advisor can guarantee that because all investments come with risk.
But I can guarantee you that if you pay off your mortgage early there are absolutely no risks involved and you will never be without shelter especially in your retirement one reason why most of us don’t pay off our mortgage early is that we don’t have extra at the end of every month to accomplish this goal.There is a new method called mortgage acceleration. This mortgage payoff method allows you to pay off your mortgage 13 years faster saving thousands. And the best part is you can accomplish this without spending more or changing your get to invest in a risk-free alternative which is paying off your debt before retirement.