Retirement Planning/Inheritance $

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Question
David
I am not good with financiel planning and math, I have a disability that makes it hard for me to communicate effectively verbally, and writing is difficult (MS)
I am considerd to be intelligent however, so I thought I batter ask an expert about this.
I have an outstanding mortgage of around 180K. I also have a line of credit with a limit of 20K, and only about 2K on it. I have just recieved an inheritance of over 130K. I plan on making an appointment with the bank that holds my mortgage.
I would like to be mortgage free as I will soon be retiring (I am 60). My thought is to put all the inheritance on the mortgage, increase my line of credit to 50K and use that to pay off the rest of the mortgage. Does that sound right? Should I keep the mortgage and pay down a smaller principle?
I have no plans to travel, my kids are on their own and doing fine. It would be nice to be mortgage free and only hold only one debt. Thanks!

Answer
Hi Bud,

That's a hard question to give you a definitive answer without knowing more about your financial situation. If interest rates in Canada are anything like they are here in the US, it's quite possible to keep all or part of the mortgage and use the money for retirement where you could quite possible earn more interest than you are paying. Plus, I don't know about Canada, but in the US mortgage interest is tax deductible.

Here are some of the questions you need to ask yourself to determine what is right.

Can I afford the mortgage on my retirement income?

Do I have life insurance to pay off the house? (if leaving a free and clear house to the kids is a priority).

What is the market value of the house? How much equity do you have in it?

I hate to be so blunt, but having MS makes you a bit more likely not to live to average life expectancy. You may want to enjoy the money from the inheritance while you are still alive rather than giving it to the bank. They will get their money one way or the other.

I hope this helps, please feel free to ask more questions. Best of luck!

Dave
diannopollo@twcny.rr.com

Retirement Planning

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David M Iannopollo

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I am a professional financial advisor who can assist you with answers on mutual funds, annuities, IRA's, rollovers, qualified and non-qualified retirement plans, retirement planning, educational planning, life, disability and LTC insurances. I can also show you how to take advantage of the stock market gains without the risk of loss!

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