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Having a retirement plan is very important to be able to take care of yourself when you are older in life. Social Security may not be around, or might not have much left by the time some of you reach retirement because of the big national debt crisis. If you are looking into a retirement plan that will be good for you, you might consider learning about and getting an annuity. 


If you are not sure of what an annuity actually is, it is a program for your finances that will collect money over a certain amount f time and will increase through interest until you have ended the term. At the end of the term, the annuity is effective and will pay you a fixed amount each month. The amount that you will be paid each month depends on how much was collected in the annuity before the account became effective. 


If your plan is to pay off your house before you retire, you should realize that you still need a retirement plan so that you will have income for other things, even if you do not have a mortgage payment. There are plenty of other bills that will need to be paid, so be sure you will be able to afford to stay in your home after retirement. If you can pay extra payments when you retire because of an annuity growth, that could help you to get your home paid off early and you will still have plenty of retirement income for the rest of life. 


You will need a large amount of money to open an annuity so that it will be off to a good start, and this might be a challenge for some people. You might find that the equity in your home can come out through a mortgage refinance and you could use this money to start an annuity. Mortgage refinancing with the option for cash out will make the principal balance increase, and could possibly increase the length of the loan, also. If you are able to do this, it shouldn’t be a problem to do this so that your retirement fund can start well and grow into a large amount for retirement. With how low the interest rates on mortgages are these days, it is a good time to use your equity to your advantage. 


If you have to do a bad credit mortgage, you should probably not pull the money out to put in an annuity, and you might not even get a lot of cash to pull out, anyway. Just be careful and really learn what you are doing so that you will make the correct decisions that will benefit you at retirement.