Retirement Not to Power Down Your Expectations in Retirement:
I will share with you one effective technique to take back your retirement and still look forward to those comfortable retirement days despite the turmoil in this market.
My neighbor Jim Johnson was planning to retire in the three years. But now he had to change retirement plans because of the market meltdown. He lost almost 40% of his retirement savings in than three months. This took him almost 20 years of his working life to accumulate.
Jim now has to completely rethink his retirement. When I last spoke to Jim he was planning on retiring in three years anyway. His biggest regret is that he would not be able to spend time with his grandkids and children. Jim was rethinking about his travelling plans and decided to get a part-time job in retirement to supplement his retirement savings.
Jim's biggest source of income for retirement was his 401 k. Now that he's retirement savings has been slashed, he savings will only last him 25 years into retirement. That in itself was not enough to support him and his wife in retirement. But there was one additional problem with his retirement savings.
Jim had a mortgage. His mortgage payments will be close at $1300 each month. In retirement, Jim realized that in order to have a $1300 mortgage payment, he had to use approximately $1700 of his retirement savings before tax to pay for the $1300 mortgage payment.
So not only did Jim not have enough savings to retire, a huge amount of the savings has to go towards mortgage debt. And Jim's biggest wish and retirement was very simple, if he could get rid of his mortgage payment, he could somehow still retire not have a second job and spend time with the family and his children.
If you are planning on retiring in the next five or 10 years, your entire retirement planning timeline has now changed. Not only has your 401(k) dropped in value, your equity in your home has been slashed, and probably your mortgage is worth more than the value of your home.
And the situation just got worse. You have to use your retirement savings to pay for mortgage debt that is worth more than the value of your home. Approximately 30% off your retirement savings has now got to go towards paying off your mortgage.
And Jim was right in powering down his expectations.
I have some good news for you. If you are in the same situation hoping to retire in the next 10 years, it does not have to be this way. You can still extend your time and dollars and live a comfortable life, if you are able to get rid of mortgage debt before retirement.
There is one more twist to Jim's story. Jim was in favor of paying off his mortgage early, but he's concerned was he did not have any extra cash at the end of the month to pay towards mortgage debt.
Jim was using all the extra money he had towards his retirement savings. So, his only option was to save first and postpone paying off his debts only when he retires. Now you may be facing a similar situation.
So Jim did some research and figured out that the only way to pay off his mortgage faster and keep more retirement savings was to pay extra, use the biweekly mortgage program or use some of the savings to pay off his debt.
And for the first time Jim research proved to be wrong. And he was excited about this.
The fastest way to pay off the mortgage and save thousands of dollars is to use a mortgage accelerator program. A mortgage accelerator program is a simple method of using a home equity line of credit or HELOC to pay off your mortgage faster, without changing your lifestyle.
A home equity line of credit can be used as a checking account instead of a regular checking account, and when you do that, it automatically creates savings and could slashed almost 13 years of your mortgage.
This method has been around for almost 3 years here in the US. The reason why you make may have not heard about this technique is that your banker does not want you to pay off your mortgage early. Not especially if your home is worth more than it's worth. The longer they keep you in debt, the more interest you have to pay on your mortgage.
Using a mortgage accelerator program is one simple technique to get rid of mortgage debt and build equity in your home when you retire. And the best part is that you don't have to use your savings and more importantly if there's an emergency, you can use the equity in your home as a temporary strategy to pay for your financial emergency.
You don't have to tap into your retirement savings and stress yourself out in retirement.
Jim's strategy even though it's planning to retire in three years, is a sound strategy in these financial times. He continues his contributions to his 401K savings plan and take care of mortgage debt in the short-term.
Even though paying off mortgage debt was laughed at by the financial community two years ago, it is a sound financial decision especially in these times.
But you don't have to take my word for it. If you'd like to find out how you can pay off your mortgage debt 13 years faster and save thousands without spending more changing your lifestyle go directly www.eqxl.com, and enter your name into the mortgage acceleration calculator and see for yourself in 30 seconds what the mortgage acceleration program could do for your situation. In this economy we need all the strategies and techniques we can get to restore our retirement savings.
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