Meeting the Number One Retirement Priority

Many of us have tightly-held beliefs about what should and should not be during retirement. A common one is “I should not have any debt when I retire.” This may be a lesson handed down by parents that is carried through the years or it may be a concern of a conservative investor who wants to make sure that their retirement is as worry-free as possible.

We recently met with a couple that had this as a primary goal. The husband was 69 years-old and already retired with some health problems. The wife was still working at age 66. She loved her work and had worked for the same medical practice for many years. She was determined that she was not going to retire until their mortgage was paid off. It was a primary goal for her and they were so close.

During our discussions, we reviewed with them that since the wife was now at full retirement age for social security and the husband was already taking his benefit, she could file a “restricted application” for a spousal benefit. This would allow her own social security benefit to continue to grow to age 70 but give them additional income until then. We discussed that this is a strategy that had recently been closed-down to clients under the age of 62. However, it was still available to them. With this additional income, they would be able to pay off their mortgage even faster than they had anticipated and realize their retirement goal sooner than either had thought possible. We also discussed that when the wife applied for this benefit, she should ask for benefits going back to her 66th birthday (full retirement age) to get the entire amount she was due. 

At our next meeting, the wife had applied for benefits, had received both the lump sum back payment and the first regular monthly payment and had applied all of it to their mortgage. They were both thrilled that she would be able to retire earlier than they anticipated and they would be able to enjoy more time together enjoying their children and grandchildren, all the time knowing that they were debt-free and unencumbered by high fixed costs.

Retirement goal #1 accomplished!