Categories: Press Release

How Much Money do you Need to Retire if you don’t have a Mortgage?

Debt can be a financial strain at any stage of your life. It can be crippling when you’re living on a fixed income during retirement. Do you factor debt into the equation when you ask, “How much do I need to retire?” Imagine what that number would look like if you didn’t have a mortgage. In this article, we’ll discuss how to evaluate your retirement needs after your home is paid off.

How to calculate your retirement needs

Determining how much you’ll need in retirement starts with figuring out your expenses. Eliminate your mortgage payment because that will be paid off. We’ll show you the best ways to do that in the next section. You’ll also want to eliminate any unsecured credit card debt you have if you can. That’s not something you want to carry into your golden years.

Assuming you’re debt free, your retirement needs consist of basic living expenses, like shelter and food, healthcare, travel, and transportation costs. You’ll also want to add some leisure and recreational funds to the budget. Retirement leaves you with a lot of free time on your hands. Consider how you’ll spend that time.

If you have credit card debt, consider consolidating it with a personal loan to save you money on interest payments over the next few years. You can also adjust your budget to allocate more of your funds toward paying off your debt if you’re uncomfortable with taking out a loan.

Paying off your mortgage before retirement

If you buy a house in your thirties, you can safely assume the mortgage will be paid off before retirement, provided you don’t buy another house later. Taking out a mortgage in your forties or fifties creates a different scenario. A thirty-year mortgage term will extend well into your retirement years if you make only your set monthly payments.

You could plan to save more in your 401(k) or IRA to cover those mortgage payments, or you could start making extra payments now to ensure you’re not saddled with that bill when you retire. Mortgage companies allow you to make “principle only” payments to help you pay off the loan faster and lower the total interest you’ll pay.

Creating the extra bandwidth you need to make those extra mortgage payments could be accomplished by cutting expenses or taking on a second job to increase your income. The reduced expenses option can give you the added benefit of cutting your overhead now and in the future, possibly into your retirement years.

The Bottom Line

How much do you need to retire if you don’t have a mortgage? You need enough to cover all your expenses and live the good life you worked hard for. Calculate that number and make the necessary adjustments to ensure you hit it. Pay off your mortgage, consolidate credit card debt, cut your expenses, and increase your income, if possible, to help you reach your financial goals before you retire.

Sources:

https://wealthtender.com/insights/investing/how-much-money-do-i-need-to-retire/

https://www.bankrate.com/retirement/how-much-to-save-for-retirement/

https://www.investopedia.com/retirement/retirement-income-planning/

See Campaign: https://www.iquanti.com

Contact Information:

Name: Keyonda Goosby
Email: keyonda.goosby@iquanti.com
Job Title: PR Specialist

Tags:
Go Media, IPS, Reportedtimes, CE, Google News, ReleaseLive, Extended Distribution, iCN Internal Distribution, English