Paying off your mortgage can feel like completing a marathon. With mortgage payments siphoning off large portions of the monthly budget, finally regaining access to your money can give you the influx of cash you need to secure your financial freedom in retirement.
- Buy Shares
Investing isn’t always a risky business venture. Choose your investments wisely, but keep yourself open to other opportunities that you may have shied away from in the past. Investing in a high yield fund can leave you with gains in the form of capital growth and dividends, making this an appealing choice for the savvy investors. While this is a longer-term investment, dividend income can be used to reinvesting in additional shares while leaving your initial investment untouched in the growth fund.
- Max-out your Pension
It may seem counter-intuitive to lock away your newfound wealth in a pension plan that won’t be accessible for quite a few years, but consider the savings. If you focus on the dual savings, you’ll accrue you’re likely to forget about your initial reluctance. As a 40p taxpayer, you can multiply your savings and earn yourself a hearty tax savings of £4 for every £10 you put away for the future.
- Buy-to-let Investments
Real estate always has been a great investment, and buying a property to use as a rental is a great way to grow your new cash reserves. Mortgage rates have never been better and given your new financial situation you are likely prime to negotiate the loan with your banking institution.
- Increase your insurance coverage
Mortgages have a way of being all consuming as they represent a large percentage of most household budgets. It’s easy to sacrifice other expenditures over the years in favor of paying off the mortgage. Now that your mortgage payments are behind you, it’s a great time to secure a life insurance policy or critical illness plan. These are both important pieces of a healthy financial plan as they ensure stability for the future of your family. In the event of a critical illness or death, a predetermined lump sum payment will be available to your beneficiary as long as the policies remain in force.
- Spread your wealth around
With your mortgage gone, you have cash reserves to spread between several types of investment opportunities. By putting this additional money to work for you across multiple investment schemes, you will be ensuring the stability of your financial future and not placing all your eggs in one basket.
Having expendable income can give you the freedom to spend a little more, but to also make some important changes to your retirement savings. After you’ve spent a little to celebrate your good fortune, consider using these mortgage free years and your cash reserves to put your financial future into focus.