Lesson #2 in this blog series is “Pay Down Your Debt”. Read the entire blog series HERE.
Not long after my parents acquired their first home, my grandparents paid off their mortgage. Much like depicted in the video above from an Archie Bunker show, we had a “Mortgage Burning Party” to celebrate. Family and friends and neighbors gathered and we all had a celebration.
You see our grandparents retirement plan was this: 1) They got a job and bought a home. 2) They would work for 20-25 years until that home was paid in full, and they had acquired the rights to whatever retirement plan their long time employer had in place. 3) They would throw a mortgage burning party and not long after that they would be having their retirement party.
Sadly, too much has changed. Now we hop around from job to job and we are expected to plan for our own retirement…. And we no longer focus on paying down our debt. But we should. It increases our net worth. Plus, once we retire we are not likely to have the money to pay a mortgage payment, so paying down the debt on our primary homes should be a significant part of our financial planning.
The big lesson for me was “Pay Down Your Debt”. It’s a key part of your retirement plan.