Retire earlier – say what? Whether you are 40,50 or over 60 it is never too early to ask this question and consult with your professional advisors (accountant, financial planner and mortgage broker) to make an informed plan of action. Sometimes you simply don’t know what you don’t know. There is more than one way to invest in your retirement and now more than ever there are many options that are improving on traditional ways of thinking.
Retire earlier – say what?
I work with many people who are 5-10 years before retirement who are trying to pay down their mortgage and investing in their portfolio but paying too much interest on their debt. As a result they are moving slowly to their goal without realizing there is another way.
I recently helped clients move into their dream home with the perfect home office set up and rental suite income as a mortgage helper. They had considered a traditional mortgage, both earning high income, auto loan and some credit cards. They wanted to semi-retire in the next 3 years and fully retire in 5 years. Their mortgage of $500,000 would not be paid off for 15+ years even with accelerating the pay down using the rental suite income. We looked at their current set up and then how much income they would earn working part time in their fields in 3 years, rental income and pensions while leaving their RRSP portfolio to grow. By choosing a specific lender product that allowed the clients to apply all of their income against the mortgage debt we were able to set up a plan to achieve their goal of full retirement in 5 years.
In 3 years the mortgage would be paid down by almost 50%.
In 3 years the mortgage set up would allow them to be comfortable on their semi-retirement income and still pay down the mortgage
In 5 years their mortgage would be low enough the rental income would cover the payment
In 7-10 years the mortgage could be paid off in full leaving them a home equity line of credit open limit of $500,000 if they chose to use that for future investing or real estate purchases.
Now the clients had a clear plan with specific milestones and peace of mind to make those retirement plans.
Retire earlier – say what? Say YES!
For more information and your consultation, give me a call at 604-813-8402 or email pauline@mybcmortgage.ca