By Craig Wong
However earlier than the temptation to splurge on a dear new automotive or a luxurious trip takes maintain, consultants say it’s essential to assessment your monetary plan for this subsequent chapter to make sure you’re on observe for wherever you need to go.
Nancie Taylor, an funding adviser with Meridian Credit score Union in Fonthill, Ont., says repaying your mortgage opens up alternative for every kind of issues.
“My job isn’t to inform them, it is best to do that and this and this,” she mentioned of her purchasers.
“It’s extra about, OK, that is the way you regarded right this moment. So the place do you need to go tomorrow? And it’s fascinating the place the dialog leads.”
For some, it could be early retirement, for others it’d imply extra journey, or serving to youngsters or grandchildren financially.
However whereas a mortgage cost could make up the biggest a part of the price of house possession, it isn’t the one expense, so Taylor says step one is to determine simply how a lot money is being freed up.
“Oftentimes individuals have their property taxes and their life insurance coverage form of all constructed into the cost,” says Taylor, so meaning the month-to-month financial savings could also be lower than you had been pondering.
As well as, utilities and the price of upkeep and maintenance can add up. Home equipment break down or put on out and issues like roofs and home windows have to be changed periodically, to not point out any want to replace and improve your lavatory or kitchen.
Taylor says when you have different debt, particularly high-interest debt resembling bank card balances, now’s the time to deal with that along with your more money movement. When you’ve been neglecting RRSP, TFSA or RESP contributions, now can be the time to catch up.
“When you’ve not maxed out your RRSPs yearly and you’ve got a major quantity of carry ahead room, then redirecting a few of that money movement will truly provide you with extra in your pocket right this moment,” she mentioned.
Repaying your mortgage will also be a time to assessment different components of your monetary plan resembling life insurance coverage to make sure your protection remains to be applicable now that you simply don’t have the big excellent debt hanging over your head.
“When you’re debt-free, then possibly you’re over-insured now. So it’s a very good time to convey that into mild and possibly begin other forms of insurance coverage like long-term care insurance coverage,” Taylor mentioned.
Changing into mortgage free might also be a superb time to assessment your will and property planning to make sure every little thing is updated now that your largest debt is repaid.
Sumaiya Bhula, a senior supervisor at TD, mentioned there isn’t a one-size-fits-all answer, so it’s essential to construct a plan that works for you at this key juncture.
“The truth is, if you wish to proceed to construct upon your portfolio and your wealth, that you must actually have a look at holistically what your long-term targets are,” she mentioned.
“That’s the place, you already know, the plan actually comes into place the place you have a look at your money movement and what ought to be allotted the place after which how a lot do you continue to have remaining for X, Y and Z.”
Taylor says having a plan for the cash is vital since you don’t need to miss the chance to make use of the extra money movement to get nearer to your monetary objectives.
“I simply assume in your 50s, that’s the crucial age of creating certain that you simply redirect that cash to work as arduous as it may well for you,” she says.
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Final modified: August 9, 2025
