By Craig Wong
However earlier than the temptation to splurge on an expensive new automobile or a luxurious trip takes maintain, consultants say it’s vital to assessment your monetary plan for this subsequent chapter to make sure you’re on monitor for wherever you wish to go.
Nancie Taylor, an funding adviser with Meridian Credit score Union in Fonthill, Ont., says repaying your mortgage opens up alternative for all types of issues.
“My job isn’t to inform them, it’s best to do that and this and this,” she stated of her shoppers.
“It’s extra about, OK, that is the way you appeared right now. So the place do you wish to go tomorrow? And it’s fascinating the place the dialog leads.”
For some, it may be early retirement, for others it would imply extra journey, or serving to youngsters or grandchildren financially.
However whereas a mortgage cost could make up the most important a part of the price of residence 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 folks have their property taxes and their life insurance coverage sort of all constructed into the cost,” says Taylor, so meaning the month-to-month financial savings could also be lower than you have 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 toilet or kitchen.
Taylor says you probably have different debt, particularly high-interest debt resembling bank card balances, now’s the time to deal with that along with your extra money circulate. In case you’ve been neglecting RRSP, TFSA or RESP contributions, now can be the time to catch up.
“In case 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 circulate will really offer you extra in your pocket right now,” she stated.
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.
“In case you’re debt-free, then possibly you might be over-insured now. So it’s a extremely good time to convey that into mild and possibly begin other forms of insurance coverage like long-term care insurance coverage,” Taylor stated.
Turning into mortgage free might also be an excellent time to assessment your will and property planning to make sure every part is updated now that your largest debt is repaid.
Sumaiya Bhula, a senior supervisor at TD, stated there is no such thing as a one-size-fits-all answer, so it’s vital 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, you could actually take a look at holistically what your long-term targets are,” she stated.
“That’s the place, you already know, the plan actually comes into place the place you take a look at your money circulate and what must 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 essential since you don’t wish to miss the chance to make use of the extra money circulate to get nearer to your monetary objectives.
“I simply assume in your 50s, that’s the crucial age of creating positive that you simply redirect that cash to work as arduous as it could possibly for you,” she says.
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Final modified: August 9, 2025