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Living on a Budget
From the AARP Bulletin Print Edition, November 1, 2009
Q. I’m 63 and want to retire at 65. My only debt is a $79,000 mortgage. I’m about to inherit $120,000. Should I use that to pay off the mortgage, or should I invest it?
A. Unfortunately, there’s no simple answer.
In today’s environment, cash is particularly valuable because it gives you flexibility. If you have few assets for retirement, consider keeping the mortgage and holding the $120,000 in fairly conservative investments.
If, however, your mortgage carries an interest rate above 7 or 8 percent, it might make sense to pay down the debt or refinance.
Consider consulting a financial adviser (visit www.fpanet.org) before making a decision.
Source: Philip White
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