HomeRetirement PlanAdvisors suggest that it may be wise to pay off mortgages before...

Advisors suggest that it may be wise to pay off mortgages before retirement

Published on

Navigating Financial Obligations in Retirement: What Advisors Say

Retirees Still Paying Off Mortgages and Credit Card Debt: Financial Advisors Weigh In

As retirement approaches, many individuals dream of a debt-free life, but for some retirees, paying off financial obligations well into their golden years is a reality. According to a recent Nationwide survey, just over one-quarter of self-described retirees with investable assets are still making mortgage payments, while a similar number are working to pay down existing credit card debt.

Financial advisors have varying perspectives on this issue, with some viewing mortgages as “good debt” due to being backed by an asset. Noah Damsky, CFA and founder of Marina Wealth Advisors in Los Angeles, believes that if the asset grows sufficiently to offset the cost of debt, it can be a wise investment.

On the other hand, advisors like Nicholas Bunio of Retirement Wealth Advisors caution against viewing all debt in the same light. Bunio emphasizes the importance of having enough assets to sustain retirement rather than solely focusing on becoming debt-free.

For retirees with high-interest, unsecured debt like credit card balances, advisors recommend prioritizing the elimination of these obligations to avoid financial strain in retirement. Andre Jean-Pierre of Aces Advisors in New York stresses the importance of managing debt carefully, especially in retirement when unexpected expenses can quickly escalate.

While some retirees may turn to reverse mortgages as a means of generating additional income in retirement, advisors like Andrew Herzog of The Watchman Group in Plano, Texas, advise caution. Herzog explains that reverse mortgages are not a “free money” solution and should be considered carefully, especially in terms of potential impact on heirs and future generations.

Ultimately, the decision to continue paying off debt in retirement or to pursue alternative financial strategies is a personal one that should be made with careful consideration and guidance from a trusted financial advisor.

Latest articles

Money Management International Experiences Significant Growth in

Increase in Demand for Nonprofit Financial Counseling and Debt Management Assistance in 2024: MMI...

Budgeting Tips for Pet Parents: Managing Your Furry Friend’s Finances

Tips for Bringing a Pet into Your Home: Budgeting and Planning Essentials JustMoney.co.za, a platform...

Why I Chose a Different Approach to Retirement Planning Over the FIRE Movement

Why I'm Not Embracing the FIRE Movement: Finding a Balance for Financial Independence Title: Why...

3 Things to Consider When Starting to Embrace AI in Tax and Accounting

Getting Started with AI in Tax: Understanding, Streamlining, and Preparing Data Tax and accounting professionals...

More like this

Why I Chose a Different Approach to Retirement Planning Over the FIRE Movement

Why I'm Not Embracing the FIRE Movement: Finding a Balance for Financial Independence Title: Why...

Major Overhaul of Social Security Raises Retirement Age to 70

Social Security Shake-Up: Retirement Age Pushed to 70 and Proposed Changes to Benefits The Social...

America’s Top 12 Most Costly Luxury Retirement Cities in 2024

The Most Expensive Luxury Retirement Cities in America Luxury retirement living is a dream for...