One of the major questions that many seniors have is should they pay off their mortgage with savings or with proceeds from some of their retirement accounts. The answer to that question is highly dependent on their needs, goals and retirement balances. Some financial planners recommend funding future mortgage payments by purchasing an annuity. This works well if a senior is in a fixed rate mortgage but the fees associated with buying an annuity maybe high. It’s important to remember that whether your payoff the mortgage or not, there will still be property tax and homeowners insurance expenses.
Another concept for mortgages in retirement is to consider a Reverse Mortgage when discussing aging in place and senior housing needs. Reverse Mortgages are complicated and we’ll talk more about these products in the future.
For more information on using an Annuity to Fund Your Mortgage, click here.