More than half of retired Canadians have a some debt, and mortgage debt happens to be one of them. Retired people are less likely to make extra payments, and this could result in an accumulation of interest as time goes on. Holding mortgage debt after retirement would ordinarily result in higher interest costs and reduced cash flow.
It is, therefore, important for persons considering retirement in the near future to ensure their mortgage debts are reduced to the barest minimum before calling it quits with their employers. This is important due to the regular periodic repayments as the source of funds is sure to be reduced after retirement.
Mortgage Debt After Retirement
Entering the new world of retirement often means you have to live on a fixed income. And this would normally mean that priority is given to fulfilling the daily expenses, and other expenses like regular mortgage payments are relegated to the bottom of the list.
Carrying a mortgage debt into retirement will ultimately affect your retirement plans, and cash flow as your mortgage payments will come from either your pension earnings or retirement savings. These two sources are not meant to service debts, but help to enjoy retirement well. It is important to have a mortgage debt repayment plan that effectively takes all the phases of life into consideration with forethought towards the retirement stage.
Tips to a Happy Retirement, Even with Mortgage Debt
For retirees to increase their cash-flow and have a happier retirement life, consider the following mortgage management tips:
- Get expert advice from a professional advisor to help structure your income to reduce your total interest cost with the use of the several mortgage debt products available to give you cheaper interest rates and a plan to pay the balances within a specific time.
- It is important to make necessary adjustments to your payment plans today. Making regular payments that are slightly higher than the required payment goes a long way to reducing the total interest cost, getting you out of debt a lot faster.
- Try to have a budget and stick to it. This might not be directly related to your mortgage payment, but it could settle your debt faster as you try to scale up your regular mortgage payments.