I am a 57 year old small business owner. We built a home 11 years ago and have refinanced from 30 to 20 to 15 years as rates dropped and business was strong. We now have 15 year mortgage at 2.65%. I am currently paying biweekly to pay off our home more quickly as it seemed like a good idea. The original payoff would have been in mid-2028, and sometime sooner with the extra payment each year. The last couple of years cash flow from my business has waned and now we are investing little for retirement. Or retirement fund is not adequately funded and we have catching up to do. Should we refinance to a 30 year mortgage and invest the difference in our retirement fund?

Terry Says:

First, you had a good idea to pay down your mortgage, and it will be good to have it off your mind when you retire.  BUT, you should ALSO have been saving for retirement.  With such a low interest rate on your mortgage, think what you have up in investment returns in recent years on money that you did not set aside to grow tax free!

Of course that is hindsight.  But you do need to get a realistic look at how much money you will need to retire and live comfortably without losing your standard of living.    Use this Fidelity Retirement Score Calculator  (always featured on the home page at TerrySavage.com) to answer six simple questions and give you an idea how long you must keep working, how much you should be saving to have a reasonable retirement.

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