Ask Terry Questions Retirement planning

Retirement planning

By Terry Savage on November 13, 2019 | Financial Planning / Retirement

I live in California. 64 years old.married . Still owe $395,000 on home with 4.1% interest with a maturity date in 2046. With monthly payment including taxes of $2,696. If I have $50,000 I am I better off using this to pay down the principle , invest in market or use it to bring down monthly bills by investing in solar or grey water .Still working and plan to,keep working.

Terry Says

I think you’re a little old to start speculating with money destined for retirement in a few years. Sorry for that brutal honesty, but there’s an old Savage Truth that says: “Desperate money never makes money!” You can’t afford to lose any of this money!

Since you’re still working you might qualify to refinance your home at a lower rate, on a shorter term — perhaps 15 years. If you can get your mortgage paid down sooner, you might use your home for a reverse mortgage when you are deep into retirement. And you might add some of your “extra cash” to pay down a bit of the principal.

BUT, don’t tie it all up. Leave some safely in a money market deposit account for emergencies. Surely you can discipline yourself not to touch it for anything less than a dire emergency!

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