Paying off a House Early
Today we decided to share some advice that we have received from our clients versus providing advice to our followers. The focused advice of this article will be on paying off a house early and saving for retirement.
Being a younger guy, many of my clients enlighten me with financial advice. Usually the advice starts off with "I wish we would have started saving when I was your age." My fellow co-workers and I always enjoy hearing their advice and believe that some of the best financial wisdom we have ever received comes from our clients. Personally I have completed Series 65 licensing and other financial courses and think that these special licensing courses need to be replaced with basic "Finance Fundamentals."
Another piece of advice we here often is "Pay off your house and start saving for retirement." Sometimes our clients will include bible versus following these comments to provide more foundation to what they are saying. I have to agree that whether retirement is at 55 or 75, having little or no debt at retirement is an excellent thing.
Paying off a House Early & Saving for Retirement
Paying off a house early can be accomplished, but you must have discipline and delay instant gratifications that pull on us. When you first take out a mortgage paying it off seems like such an impossible task. However, determination and focus on the desired goal will help you become debt free.
Many financial advisors such as Dave Ramsey and Suzy Orman both state the importance of saving for retirement prior to trying to pay off your house. Usually the recommend 15% into a 401k to receive tax deductions or put money into a Roth IRA so that the funds are not taxed when you retire.
Paying off a House Before Retirement
One client of mine discussed with me the importance of paying off a house before retirement. He explained that when you retire income drastically changes for 90% of people. The last thing you want is for your income to change negatively but your expenses to stay the same. Solid financial planning will tell you that if your income decreases something else should decrease.
He recommended paying off a house prior to retirement so that you will never have to worry about a roof over your head. Now we all know that taxes, insurance, and utilities are expenses that continue with a house but the main expense would be gone. Financial Freedom is knowing that no one can take your possessions away.
