MAXIMISE YOUR MONEY
5-DAY CHALLENGE
SORTED MONEY MONTH
1 – 31 AUGUST 2023
Maximise your money in your 50s and 60s: 21 – 25 August
Day 2: Structure your lending before retirement
With retirement on the horizon, take time to review your financial situation. This is particularly important if you still have loans on property that you own.
Challenge yourself to optimise your financial position with this top tip from expert mortgage adviser Hamish Patel, Mortgages Online:
Assess your existing lending structure
Before making any changes, evaluate your current lending arrangements. Take stock of all your loans, including mortgages, personal loans, and credit cards. Understand the terms, interest rates, and repayment schedules for each loan. Having a clear picture of your existing debt will help you make informed decisions about restructuring.
Review investment property loans
If you own an investment property, it’s essential to assess the structure of its home loan. Stretching the home loan terms can be a viable option to reduce monthly repayments and free up cash flow. Extending the loan term might result in paying more interest over time, but it can be beneficial for easing financial strain during retirement.
Another option to consider is releasing equity from your investment property. By refinancing or obtaining a line of credit, you can access the property’s equity and use it to bolster your retirement savings or invest in other income-generating assets.
Set lending requirements in place
As retirement nears, it’s prudent to get all your lending requirements sorted before leaving the workforce. This includes paying off high-interest debts, such as credit cards, and refinancing existing loans to secure more favourable terms. Aim to reduce the overall debt burden to avoid financial stress during retirement.
Downsizing or relocating
One effective way to maximize your money in your 50s and 60s is to evaluate the possibility of downsizing or relocating to a less expensive area. Moving to a smaller home can significantly reduce housing expenses, freeing up additional funds for your retirement. Additionally, relocating to an area with a lower cost of living can stretch your retirement savings further, ensuring a more comfortable lifestyle during your non-working years.
Guidance from a financial advisor can provide valuable insights and help you navigate through the intricacies of loan structures, property investments, and retirement planning, giving you peace of mind and greater financial security.
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