Last week, we got Beth’s quarterly 401K statement in the mail. I’m not going into any detail on that, but receiving those statements is always a great reminder of how we are doing in our retirement planning.
Thinking about the future
We try to think out about different timelines…5 years, 10 years, even 20 years out into the future. We try think about the life changes that will come between now and then. We’ll stop paying for preschool at some point. The van will get paid off, but we might need to replace the older car. Eventually those student loans and credit cards will be completely paid off, right?
One of our big topics of conversation has to do with how we use the disposable income after those loans are taken care of. Of course, we are looking to invest further towards our retirement, but there are lots of ways to do that. We are strongly considering putting some of that extra towards our mortgage. Typically, the mortgage is of your largest monthly expenses. Even paying an extra $100 per month can quickly cut 2-3 years off of your mortgage and save you tens of thousands of dollars in interest. According to Yahoo! Finance, paying off your house is one of the top 5 Ways to Avoid Outliving your Retirement Savings.
Flexibility in Retirement
One thing that I really value is flexibility. Maybe we want to live in our current house forever; maybe not. By working a little harder to pay the house off early, we may have options to move or even remodel our home in the future. Even if life takes us somewhere else before the house is paid off, we will have more equity in the home and more options will be available to us. I just don’t like feeling stuck somewhere.
Should you work to pay off your home a littler sooner? That’s really up to you and where you are in your financial planning. If you aren’t sure, talk with a professional retirement planner for some great advice and retirement options.
Is your house part of your retirement plan? What are you doing to prepare yourself for retirement?