Paying off Your Mortgage Faster to Plan for Retirement

What retirement goals have you considered? Do you want to be debt free with more wealth; travel more; enjoy your best years relaxing in your fully paid-off house? To live comfortably in retirement, don’t assume you can rely solely on Social Security to meet your needs. And company pension policies that pay a fixed income for life have essentially vanished. That’s why, no matter your present age, it’s vital to plan to build a healthy nest egg right now.

You need to know your financial position and whether you’re on the right path to security in retirement. Do you have IRAs, 401(k)s or other estates to liquidate in retirement? If not, start now with smart planning and investing. Your remaining years working are your last shot at aggressively saving money in tax-advantaged retirement accounts and creating an emergency fund for unanticipated expenses.

Senior homeowners are understandably uneasy about their income dropping when they retire while their mortgage payment remains stable. But what if you planned ahead in order to live without a mortgage payment? One possibility just might be to pay off your home loan before you retire, then start saving the money you would have paid toward the mortgage. If you have enough years before retirement, you can do that by making biweekly mortgage payments.

Making biweekly mortgage payments can ultimately pay off with increased savings and financial security in retirement compared to paying traditional monthly premiums. The biweekly mortgage plan also works well with other types of debt, such as auto loans or credit cards.

How it works: You make half of your traditional monthly mortgage payment every other week (13 each year instead of 12, because 52 weeks divided by two equals 26 payments), except you’re paying just a tad bit more with each biweekly payment. Withdrawals from your account align conveniently with paychecks and your monthly budget, while an extra half-payment twice a year toward principal decreases interest over the life of the loan — visit the AutoPayPlus.com for all the specifics.

If you have a 30-year mortgage for $272,000 at 4.5%, this particular strategy can save you more than $37,000 over the course of the loan. Moreover, you’ll retire your debt 53 months earlier than expected using a biweekly mortgage payoff plan.

Use the AutoPayPlus loan calculator to create a plan for how much extra money you’ll need to apply to your debts with biweekly payments for the faster loan payoff you want. Experiment with various payoff scenarios to see how biweekly mortgage payments can help you eliminate debt quicker, build wealth and achieve your goal of a golden, financially secure retirement.

Use biweekly mortgage payments to pay off your home loan sooner and save more for the retirement of your dreams.