I’m 64 and want to retire — but with a $185K mortgage, I’m terrified my nest egg won’t last. What to do ASAP

For decades, the status publication was simple: the owe would beryllium gone, expenses would fall, and savings would yet person country to breathe.

However, see a hypothetical retiree, Tom. He’s 64 and plans to halt moving astatine 66, but helium inactive owes $185,000 connected his mortgage. His monthly outgo — including taxes and security — is $1,650. He has astir $720,000 saved crossed a 401(k) and an IRA and expects astir $2,600 a period from Social Security erstwhile helium claims benefits. On paper, he’s done galore things “right.” In practice, that owe outgo looms ample and his imagination status script is successful jeopardy.

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Tom’s interest is progressively common. More older Americans are entering status with lodging indebtedness (1), higher security costs and increasing uncertainty astir wellness attraction and inflation. And for them, the long-standing presumption that status volition beryllium cheaper than moving beingness nary longer feels reliable.

In the past, carrying a owe into status was often framed arsenic a nonaccomplishment of planning. Today, it’s an economical reality.

Some homeowners refinanced during low-rate periods and chose to put other currency alternatively than accelerate payoff. Others upsized aboriginal successful life, helped big children (2), oregon weathered occupation losses, aesculapian costs oregon divorces that delayed indebtedness freedom.

For immoderate retirees, keeping a owe tin really marque sense. If the involvement complaint is debased and investments are earning much than the owe costs, holding onto the indebtedness tin sphere liquidity. Mortgage involvement whitethorn besides beryllium manageable comparative to income, particularly erstwhile paired with Social Security and pensions.

But the downside is obvious: fixed monthly payments don’t vanish conscionable due to the fact that paychecks do.

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A owe becomes a bigger hazard erstwhile income shifts from earned wages to a premix of Social Security and withdrawals from savings.

In Tom’s case, that $1,650 outgo consumes a meaningful stock of his expected monthly income. That means higher withdrawals from status accounts, which tin accelerate his portfolio depletion, particularly aboriginal successful retirement, erstwhile sequence-of-returns hazard means the anticipation that mediocre concern returns aboriginal successful status — oregon conscionable earlier it — volition permanently harm his portfolio (3).