When you0ve reached retirement age and are ready to kick back and take life easy, it’s not a good move to put yourself in the stressful position of having to pay a mortgage. Whether it’s for a new house or second vacation home, if you have the savings, many financial advisors say pay cash.
Mortgages increase risk at a time when it should be avoided. As you move retirement accounts from high-risk stocks to low-risk money market funds as you get closer to retirement day, it’s just as prudent to avoid the financial risk of a mortgage at this time.
That said, there are some cases in which it might be advantageous to the retiree to assume a mortgage. The tax benefits come to mind first. Taking advantage of this may require some fancy paperwork with your retirement accounts, though. One advisor has recommended purchasing a higher-priced home and using the income from your IRA to pay down the mortgage. The individual approaching retirement age, either sells his or her current home or purchases a second home 0 one that is more valuable than the current home. The individual then increases the cash flow from his or her IRA or other retirement […]

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