A Home Improvement That Will Help You Retire
It's a dream of many homeowners to pay off their mortgage before they retire. However, expenses can pile up as we age and this simply may not be possible. In an effort to put your home to work paying for itself, energy improvements such as solar panels can reduce your household expenses and make paying off your home easier.
Below are some things to consider when planning how to:
- pay off your home before retirement
- improve the value of your house should you choose to sell, and
- reduce your monthly utility expenses long-term
Risk Tolerance
If you're close to retirement and your current investments are held in conservative, low-return funds, then paying off your home before retirement is critical and necessary. Your money may be safe, but you're likely paying more in mortgage interest than you're earning on your account.
If you struggle to save on a regular basis, paying off your mortgage before retirement will likely make it much easier for you to relax and feel safe leaving the working world. Getting a short term loan for a solar install will pay off quickly and will provide you with reduced monthly expenses for life while you live in your home.
Tapping Into Retirement Savings To Pay Off Your Mortgage
When your 401(k) becomes available to you at 59 1/2, it is fully taxable. Depending on how much you take out, you may be pushing yourself into a much higher tax bracket to save a small amount of mortgage interest.
However, there is great peace of mind to be gained by paying off your mortgage, and this peace of mind can make your retirement planning much simpler. Additionally, if you plan to use a reverse mortgage to fund your retirement, paying off your house first will make setting up the reverse mortgage a much simpler affair.
Finally, it's important to remember that a fully paid for house is pretty good investment bet. Again, this goes back to risk tolerance. If you're approaching retirement age, there's less time to make your investment money back in the event of a market crash or correction. If the housing market crashes, your home may be worth less but you have a roof over your head and riding out the market wave will be simpler and safer.
Benefits of Solar Power Improvements
Depending on where you live, the addition of solar power to your home can both improve the value of your home and reduce your monthly utility bills. You may qualify for a tax credit for your solar investment and the short-term debt of a solar loan can lead to long-term savings. When it comes time to sell your home, a solar system that offers specific evidence of utility savings can be a great selling point.
Solar offers other benefits, including tax breaks and financial incentives. You can take a sizable percentage of your solar install off of your federal taxes and your state may offer incentives as well.
Finally, installing solar on your home may put you in the position of being able to sell power back to your electric power provider. Be sure to check out current rules and regulations on this particular method of actually making money off of your house as not all utilities will allow this.
A paid-for home can give you great peace of mind and make your retirement budgeting process a lot simpler. Going the extra step of installing solar power on your house is a fairly quick way to both improve the value of your property, reduce your long-term expenses and possibly even make money on your home by selling power back to the grid.
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