#HappyRetirees #mortgages #MultipleSourcesOfIncome #FullCalendar
There are three characteristics that make happy retirees.
Those are a paid-off, or at least paid-down mortgage, multiple sources of income and a full calendar of activities.
So says Wes Moss, who writes a Money Matters column for The Atlanta Journal-Constitution, and has a Money Matters radio show on WSB in Atlanta. He discussed happy retirees in his April 24, 2018, newspaper column.
Moss narrowed the happiness criteria down from the research he did for his book, “You Can Retire Sooner Than You Think.”
The mortgage issue is certainly up for debate. Certainly, when one is working, paying down mortgage debt is certainly a good use of money. It’s not a substitute for saving and investing, but if you have a relatively high mortgage interest rate, applying extra money to one’s principal in mortgage payments is like putting money in your pocket.
Of course, if your interest rate is relatively low, and you have a good financial adviser, you can probably do better saving your cash and investing it well. A rule of thumb: if you have a 5 percent interest rate on your mortgage, and you have a good financial adviser who can certainly make you a good deal more than that on your money – on average, of course – then saving and investing could be more lucrative over time.
On the other hand, in a down financial market, paying down that mortgage debt IS a good use of excess cash you might have. It’s certainly better than spending it on frivolous things.
Keep in mind that the more debt you pay down early in the mortgage, the less interest you’ll be paying toward the end of the mortgage. As more of your monthly payment is applied to principal, the sooner your mortgage will be paid off.
Multiple sources of income is also a good thing – not necessarily more income, as Moss points out.
We think of income sources for retirees in terms of a pension, Social Security and perhaps a low-stress part-time job that you like doing.
If you’d been a good saver and investor in your working years, you might also use some of the dividends, interest and other income your nest egg is now earning for you. Try to refrain from touching your nest egg’s principal. Whether you die young or live a long time, as long as your principal is relatively intact, you will NEVER outlive your money.
As for a part-time job, it may serve two purposes. It will provide some pocket money and keep you busy in your elder years. However, if you don’t need the job, your time may be better spent pursuing your favorite hobbies or other activities like, say, golf or travel.
Or, you could add to your sources of income one of the many vehicles out there that allow folks – retirees or not – to make a potentially substantial income by spending a few part-time hours a week. To check out one of the best such vehicles, message me. It could allow you to spend some non-stressful, even fun, time adding to your income sources and help friends do the same.
The lesson here is to plan for your retirement while you are young. You never know when you will retire – or be retired by your employer. You never know when that one bad manager comes into your orbit and kills your career.
If you plan well, perhaps forgoing some immediate pleasures to save money, you can retire, as Moss’ book title says, sooner than you think. If you are forced to retire before you want to, good planning could allow you walk away from that job with a smile.
Peter