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As retirement breaks the horizon of your future and becomes something you view as an impending reality versus the “someday” concept of retirement you had in your 20s, it’s time to start preparing your mortgage, along with your other finances, for the change ahead.

To get the most out of your retirement dollar, we’ve outlined five tips to help guide you through the first steps of the process of preparing your home mortgage for your new lifestyle:

1. Determine your mortgage retirement plan option:
   • Preservation = Refinance with a shorter fixed-rate mortgage – This option ensures you’ll save on interest during the life of your home loan, then once the mortgage is paid in full it can provide additional money to help fund your retirement nest egg.
   • Accumulation = Refinance to a long-term mortgage at current low rates – This option allows you to reduce your payment and redirect the monthly amount to an investment account. As long as the estimated annualized return on the investment is greater than your mortgage rate, and has a risk profile that fits your capital plans, you are putting your money to work for you to increase the nest egg.
2. Downsize to a smaller home – A smaller home can mean easier, less expensive maintenance and lower utility bills during retirement.
3. Set a goal to pay off your mortgage now – If you are 10 years or more away from retirement, then set a goal to pay off your mortgage now. In doing so, you’ll spend less on other expenses now and you’ll create an opportunity to help your retirement dollars go farther in the long run.
4. Save money with interest tax deductions – Tax deductions may apply for interest payments on mortgages. The money saved here can be put toward your retirement 401(k) savings account or paying off your mortgage before retirement.
5. Create a plan – Meet with your Loan Officer and financial advisor to discuss where you are in your retirement planning cycle and work together to create a mortgage retirement strategy that best suits your overall retirement goals.

Marcus McCue | EVP & CBDO