Retirement Trip Wire aka: The Mortgage

While looking at my mortgage balance recently, I realized that I have a small problem with my retirement plans. I want to retire when I’m 45, which is about 16 years away. The problem is my mortgage amortization is currently at 19 years, so I have to either accelerate the mortgage pay down by three years or live with the payments for three years in retirement.

I’ve never liked paying interest, so I think I’m going to try to find a way to accelerate the pay down by three years. Currently I have maxed out my semi-monthly payments with my current mortgage, so I have to wait until three years to pick a shorter amortization or start applying lump sum payments to it. I’m not sure which way I’m going to do it.

So like all good plans, I’m finding some holes in my plan to retire at 45. So far I don’t think I’m past the point of saving the plan, but this has proven to be a bit more of a challenge that I first thought.

Year End Check Up: Net Worth Update

With the end of the year approaching I think it is time to take a snap shot of my net worth and find out how I’m doing. In general practice, even if you do nothing else for the entire year of tracking your net worth it is useful to get an end/start of year snap shot of your financial health so you can track your progress at least yearly.

House $198,000 (I recently did a survey of house listings in the area, apparently my last estimate of $195, 000 is a bit low since a house with 500 sq ft less that mine is selling for $198,000.)
RRSP $11,600
Wife’s RRSP $4800
Old Work Pension $10,500 (I’m almost embrassed to say I forgot about this in my first net worth calculation)
Wife’s Investment Account $4200
ING Savings Account $1000

Mortgage $149,900
Line of Credit $0 (As I mentioned before, I keep this as part of my emergancy fund.)

Therefore my net worth now stands at: $80,200.

Even with my ‘lost’ pension money that is still a nice little increase from my first net worth check back in Nov. See you in the New Year.

Goals for 2007

It’s the end of the year, I’m starting to plan for next year. So I thought I would share a few of my goals for the next year.

1) Save $10,000 in 2007. This will include RRSP accounts, taxable account, and the pension plan.

2) Investigate other streams of income. I’m basically going to have a look at a possible small business or a rental property. I’m not entirely sure what, but I’m going to start devoting some of my time to looking at my options.

3) Keep painting and other minor renovations to the house to boost its value by at least $10,000.

I know that hardly earth shattering goals, but I like to keep my goals for a year fairly realistic. I know too many people who make goals that are too hard and then they get frustrated by not making them.