Total Financial Solutions President/CEO Arif Halaby is reminding residents that having your mortgage paid off by the time you retire probably isn’t the asset you think it is, and recommends prioritizing liquid assets instead.

“If you’re buying a house for $700, $600, $800K, don’t expect to pay it off before retirement,” Halaby said. “That’s a lifelong expense that never ends.”

While some homeowners with the ability to accelerate their mortgage payments may think they’re setting themselves up for a more successful retirement, this usually isn’t the case if they’re choosing to neglect other things as a result, such as saving for retirement, saving for emergencies, or paying down other debts.

Related: Total Financial Solutions President/CEO: ‘Retirement Accounts Are Not Savings Accounts’

“You really wanted to crack that nut and paid down the $800,000, and you paid it off. Guess what? You’ve got a house that’s paid off — that’s fantastic. Well what are you going to do?” said Jeff Girard, Halaby’s co-host on “Total Financial Solutions Safer Money Hour.” “Are you going to peel off drywall and take it to the store?”

Real estate not only doesn’t pay for groceries and other expenses, it also costs homeowners even after the mortgage is paid off, including insurance premiums, taxes to the county assessor, home repairs, landscaping maintenance and more.

“You call it an asset, but now it’s still costing you,” Girard said. “This is not an asset in the form that you think it should be for retirement.”

Halaby said he prefers his clients to owe money on their house in retirement so they can have cash available to pay for expenses, bills, emergencies, etc.

“That’s a pretty important part of your savings and retirement, is knowing that you have liquidity, you have access to money, you have cash available,” Halaby said. “That makes a huge difference when you’re trying to build comfort and safety and confidence.”

“If you walk in and you say to yourself, ‘My retirement account is my daughter’s college fund or my son’s college fund,’ I’m going to tell you, ‘You’re using the wrong tool for the job,’” Halaby said. “‘My savings account that I’m earning .07 percent interest, that’s designed for my retirement someday,’ — wrong tool for the job.”

Halaby continued that his company’s mission isn’t to make their clients wealthy retirees, but to make sure they have multiple sources of consistent income they can rely on in retirement.

“Isn’t that a difference? Our job is to keep you from going broke,” Halaby said. “Don’t forget that, because your wealth will come from your habits. It will come from your spending habits, it’s going to come from — believe it or not — the job you chose, the spouse you chose, the career path, your ability to grow income over time. Those are all things that determine your wealth.”  

At Total Financial Solutions, Halaby and his staff believe that money has a job to do, and can help their clients plan for retirement so they have the best chance possible at a successful financial future.

Total Financial Solutions offers assistance with preparing for retirement in Santa Clarita and the surrounding valleys. Santa Clarita financial professional Arif Halaby, a Certified Estate Planner, and Total Financial Solutions staff work with people of all ages, helping them protect, grow and preserve their assets through an individualized approach. As a well-known financial professional, Arif Halaby is also the host of “Total Financial Solutions Safer Money Hour” on KHTS AM-1220. Launched in 2004, the show offers listeners retirement planning tips and guidance for dealing with today’s ever-changing financial needs.  

Total Financial Solutions, Inc.

24322 Main Street

Newhall, CA 91321

661-753-9683

800-990-7344

Total Financial Solutions – Newhall

https://www.youtube.com/watch?v=KdZ6LlPD7So

Arif Halaby, Total Financial Solutions, Financial Planning, Planning for Retirement, Retirement Planning