Monday, October 13, 2014

Creative Retirement: Mortgage-Free Means Freedom

Wow! I had no idea so many people retire owing money on their homes; according to this article, nearly a third of them do. That's up from 20% in 2001.

I could never do that. To me, having a mortgage is like having your ankle tethered to the ground. Your options are so limited. Besides, those of us (and I know we're legion) with no pension or big fat retirement account waiting for us consider having no house payment to be a huge asset in retirement.

When you retire with no mortgage, the traditional largest monthly expense just isn't there. It makes a huge difference in your bottom line, and gives you peace of mind that you'll always have a roof over your head. And should you decide to sell your house at or before retirement (a wise move, in my experience), you now have a nice chunk of change to work with. You can:

  • Pay cash for a more suitable place in a different area.
  • Buy something cheaper, leaving money for other things you need.
  • Rent for a year or two, keeping your cash in reserve while you investigate your options.
  • Buy a small used RV and travel for a while, leaving your stuff in storage until you're ready to put down roots again. (When, if you're lucky, you can sell the RV for not much less than you paid for it.)

Oh, the things you can do when you don't have a house payment anymore!

Now I understand that mortgage rates are incredibly low and that you can probably earn higher returns in the stock market, IF you have the stomach for it these days. But I'm no gambler. I'd rather have zero debts so I know for certain that I owe no one anything, than hope that I'll make a greater return in stocks than I pay in interest for my mortgage.

That's why I've been mortgage-free for the past 12 years, and I'm not even retired yet. How about you?


  1. I couldn't agree more. We are two years from being mortgage-free and would not consider retiring before then. I read an article over the weekend that said housing is 1/3 of the typical retiree's budget. Even without a mortgage, we still have property tax, insurance, and maintenance -- and those are enough. :-)

  2. That's for sure! Thanks for weighing in, Jean.