These days, many Americans may be more likely to carry at least some amount of outstanding debt into the years before their retirement, and this can often be true of the outstanding balances on their home loans.

A large percentage of baby boomers who had sizable mortgages faced severe financial troubles during the recent recession, which made it more difficult for them to pay off those loans as they may have originally planned. As such, many are now carrying their home loan bills into retirement, which can have both benefits and drawbacks.


First and foremost, when dealing with their mortgages, many may wonder exactly how much that will affect their ability to live comfortably in retirement. Most people will see their incomes diminish in their post-career lives and maintaining a mortgage during this time can take a sizable chunk of that money. Therefore, it may be more difficult for retirees to relax as they might have planned, and some might even have to take on part-time jobs to help meet their obligations.


Similarly, having large mortgage obligations in the run-up to retirement can be equally troubling for some borrowers because it can diminish their efforts to put as much money as they may want or need to into their various savings accounts. That can, therefore, reduce the income they may have expected to be able to tap once they stop working.


But while most research suggests that carrying a mortgage into retirement isn't desirable, doing so can be somewhat beneficial for some homeowners who are required to do so because of other financial concerns they might have faced. For instance, there are a few tax breaks allowed to homeowners still paying their mortgage, and can also increase their liquidity, which allows them to better cope with any financial emergencies that can arise in retirement.


Of course, that can lead to its own problems, such as how the mortgage may be paid in the future as retirees struggle to cope with the added financial burden such a crisis may create. For this reason, it's important to have an emergency savings account in addition to traditional retirement savings vehicles that can be tapped so as not to create shortfalls in other areas.




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