This week I’m sending out one of my favorite card types – a card to congratulate someone on paying off their mortgage!

For many people, paying off their mortgage is a key component in being ready to retire, because with that step down in expenses their nest egg becomes enough to meet their needs. But that’s certainly not the only way to do it. Instead, there are a lot of choices:

• Pay it off, and then retire.
• Pay it off, keep working and invest (or enjoy) that newly freed up cash flow.
• Have a long mortgage at a low rate that you plan to keep into retirement. You’re investing the difference or living within a lower monthly budget.

Make sure to consider:

• the short term effect on your cashflow, eg can you afford what you want to do today
• the long term effects on your cashflow, eg how much in total your decision will cost, and
• the flexibility in your cash flow to handle a sudden shock of an unexpected expense

A well considered plan that you can stick to is generally better than a plan you stumbled into. So whatever you’re doing, do it intentionally.

Do you have a plan for your mortgage? Do I get to send a mortgage payoff congratulations card to you soon?