I am 65 and have no savings and will be soon on SS only. I am almost debt free except for mortage and car
I have saved up $10,000 and want to know if I should use it to reduce my new car loan from $24,000 to $14,000 (4.55%loan) or make a principal only punt on my mortage which is in yr. 10, has a punt of 325.00 monthly, a balance of $37,500 roughly and interest is 8.5%. Or do neither. The only other debt is $1,800 on last credit card to pay off and i think i will get paid before i go on SS. (4 months from now)
If you can comfortably afford your monthly obligations right now, you may want to hold off until after transition to Social Security before you do anything with your $10k savings. I say this because switching to only the Social Security income may bring changes or require some adjustments to your budget. Your savings can act as your “safety net” if there is a blip in this transition. Without it you may find yourself in a tight squeeze should the SSI take longer than expected to kick in, or should you run into any unexpected expenses.
Once you fully make the transition over to Social Security and you feel comfortable with your budget, then maybe you can look into using some savings to pay down on your debts. Even then you will want to make sure that you leave yourself some kind of savings reserve.
Good luck and please keep us posted on your progress in the comment section below. I am subscribed to this post and can answer any further questions you still have.
Andy is a licensed real estate broker in Massachusetts and is the founder of Northeast Properties in Norton, Massachusetts. His brokerage is designed to help homeowners in today’s difficult real estate market, specializing in short sales. Andy speaks with Massachusetts homeowners every day, helping them to address their questions or issues with short sale or loan modification. He enjoys helping consumers arrive at the correct solution to their problem, and believes that the only way to correctly do that is by presenting them with all of their options in an un-biased manner.