Unlocking the Secrets to a Happy, Successful, and Wealthy Retirement
As we approach retirement, one question lingers in our minds: how can we maximize our income and ensure a comfortable life after work? In her latest book, “How to Retire: 20 Lessons for a Happy, Successful and Wealthy Retirement,” Christine Benz, a renowned expert in personal finance and retirement planning, sets out to provide answers to this confounding question.
The Great Mortgage Debate
One crucial aspect of retirement planning is deciding what to do with our homes, which often hold a significant amount of equity. According to the Joint Center for Housing Studies of Harvard University, homeowners aged 65 and over had a median home equity of $250,000 as of 2022, up 47% from 2019. This raises the question: should we pay off our mortgage?
Expert Insights
Christine Benz argues that paying off a mortgage can free up more monthly income, providing peace of mind and flexibility with portfolio withdrawals. However, JL Collins, a financial blogger and bestselling author, suggests that the decision depends on both financial and emotional factors. For mortgages with rates below 3%, it may not make sense to pay off, as better returns are available in the stock market. For rates above 6%, paying off the balance provides a guaranteed return.
The Emotional Aspect
Ted Jenkin, a certified financial planner, notes that getting rid of mortgage debt can provide career flexibility and a sense of security. However, he also acknowledges that the decision is often more emotional than financial. Christine Benz recounts a conversation with a friend who was averse to paying off her mortgage, citing the emotional impact of seeing her portfolio shrink.
Retirement: A New Chapter
Retirement is not just about financial planning; it’s also about emotional preparation. Michael Finke, a professor of wealth management, emphasizes the importance of finding new sources of joy in retirement. Jamie Hopkins, chief wealth officer at WSFS Bank, suggests that individuals should think beyond short-term goals and plan for the entire year.
A Chance for Reinvention
Ultimately, retirement offers a chance for individuals to reinvent themselves and pursue new passions. As Jordan Grumet, a hospice doctor and author, notes, it’s often the chances we don’t take that end up haunting us. By approaching retirement with a clear understanding of our financial and emotional needs, we can unlock a happy, successful, and wealthy post-work life.
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