USE YOUR MONEY FOR LEVERAGE
Consider the advantages of a Mortgage!
Burning the mortgage has been the mindset for most of us. I was born in 1949 and for most of my life I’ve dreamed of the day that my home would be debt free. And recent studies reveal that I’m not unlike most everyone born around this time. Consider this, the higher your tax bracket, the greater the benefits of a mortgage . But how can a mortgage benefit anyone on retirement income when your income bracket is likely to be lower?
Conventional wisdom’s mindset has been to pay off the mortgage for future security. For most of us, it seems unsettling to carry over a mortgage into retirement. But, accountants may advise you take a different course. You should seek the advice of professionals when considering paying off your mortgage before or after taxes. Recent advice by our accounting community is to consider selling your home. From the sale, take the proceeds to purchase a new home with part of the proceeds to make a substantial downpayment. The remaining balance from the sale of your home could be used as a nest egg or invested in other tax-deferred or tax savings investments.
This makes sense for most seniors that have lived in their homes for some time. It gives seniors an opportunity to get newer housing, invest or save the proceeds for health purposes, tax-free or tax-deferred investments or perhaps a second retirement home that might be used as an investment property with income advantages and tax advantages. Your equity in your home is subject to market pressure as well. Selling maximizes your equity position by not putting your equity at risk if future market condition should worsen. Many future retirees lost their retirement future when the housing market collapsed. Always seek professionals advice to determine your money leverage possibilities.