Ask Terry Questions Mortgage is Paid Off! Now What?

Mortgage is Paid Off! Now What?

By Terry Savage on February 28, 2019 | Financial Planning / Retirement

Hi Terry,
We’ve just paid off our mortgage! Now what? Any suggestions for what we should do now, a year from now, 5 years etc.

Thank you!

Terry Says

Congratulations!  You can splurge on a bottle of champagne, because this is cause for celebration!  Then set up an automatic payment in the amount of your mortgage payment — either divided into IRA accounts for you and your spouse (assuming you are working and earning money to qualify to make an IRA contribution).  And make it a Roth IRA if you qualify based on income.  Just go to Fidelity or Vanguard and they will set it up for you.  And you won’t miss the money because you’ve been paying it regularly!

ONE CAVEAT:  You may have paid off your mortgage, but you still owe property taxes and insurance!  Your bank was likely collecting — and paying those two big expenses — on your behalf, right out of that monthly mortgage payment.  Now you need to set up another money market account, and make an automatic monthly payment into it — so there will be money when those bills come due!

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