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move the clock forward


by Norma J. Goldman

To find out more about retirement, contact the Free Will Baptist Board of Retirement at (877) 767-7738.

FAST FORWARD YOUR MENTAL CLOCK FIVE YEARS, ten years, or perhaps longer, depending on your age. If you plan to retire by that time, will you be ready to take that step? The ideal scenario for a person or family at retirement is to have:

  • No outstanding debts, including your home mortgage;

  • A plan in place that will provide at least 80% of the income received while working;

  • Paid for automobile(s);

  • A retirement home that fits your family, lifestyle, and health needs; and

  • A transition plan to move from an active work life to an active retirement.

Let’s focus on one of the wisest, most practical steps toward retirement—paying off your home mortgage early. If your present plan doesn’t call for the mortgage to be repaid before retirement, let’s examine steps you could take now to make that happen.

Apply Extra Money Monthly to the Principal Balance

Although financial institutions usually discourage being debt free, some mortgage companies are beginning to help consumers repay mortgages sooner by offering options. The first and most common one is to apply extra dollars toward the principal balance. Most coupons provide space for the homebuyer to include this pre-payment at the time you make your monthly mortgage payment. Applying as little as $100/month extra can take years off the average mortgage. Lenders rarely charge for handling extra payments.

Make an Extra Payment Each Year, and Reduce Interest Paid

A second method is to make payments every two weeks, rather than one payment each month. This method cuts your debt in two ways. By paying every two weeks, you will make one extra payment annually. You will also pay the debt earlier, reducing overall the amount of interest paid. Some lenders charge a nominal fee for this extra transaction, but the fee is generally $2-3—well worth the cost.

Downsize Prior to Retirement

A third method is to downsize, using the difference between the value of your current home and a smaller home to pay off the balance of your mortgage. Many couples hold on to large homes with multiple bedrooms to accommodate visiting children and grandchildren. But it makes little sense to do so for a visit once or twice a year. Be sure to consult with qualified professionals to confirm that the costs of moving do not outweigh financial gains. Downsizing prior to retirement will get you started on the right foot when retirement day comes!

Consider carefully your ability (and willingness) to care for and maintain a large property throughout retirement. Taxes, painting, lawn care, landscaping, and repair eat up not only money, but time and energy. Consider how your present home is configured. Are there many steps at the front or back entrance? Is there more than one level to be navigated by narrow hallways and steps? Many retirees find it much easier to live in a one-story house, with a maximum of two steps into the front or garage level entrances. Hallways should be wide enough to accommodate wheel chairs or walkers, even if that seems a remote possibility at the present. A smaller lot also means more time for rewarding pursuits, and less worry about daily upkeep and long absences from home.

Another benefit of downsizing is the move itself. However painful it might seem, going through stored items, evaluating furniture needs, and weeding out unnecessary items is extremely rewarding! As you eliminate clutter, what remains will be easier to find, maintain and enjoy.

Why not get started today on a plan to have a paid-up mortgage at retirement?

Former magazine editor Norma Jackson Goldman enjoys a free-lance career in her retirement. She lives in Nashville, TN.






©2005 ONE Magazine, National Association of Free Will Baptists