Traditionally, American homeowners have focused on being mortgage-free by the time they’re ready to retire. While paying down debt continues to be an important objective for many, today’s retirees are likely to be far more comfortable using credit than their parents were.

In fact, a 2007 survey found that 41% of baby boomers do not think it’s important to pay off their mortgage before they retire. Meanwhile, a 2007 poll suggests that more than one in three Americans expect to retire with debts of up to $100,000. That includes continuing to carry a manageable mortgage, especially if it enables them to live out their retirement dreams.

New expectations
Why are baby boomers planning to use credit to supplement their retirement income? Part of the reason is that expectations surrounding retirement are changing.

Far from slowing down when they leave the full-time workforce, many baby boomers plan to work part time or pursue leisure activities. They’re looking forward to travelling, buying vacation property and pursuing favourite hobbies at home.

Some retirees may also face increased health costs associated with their own or their parents’ care. These individuals are likely to see their expenses increase, rather than decrease, post-retirement. For them, borrowing may be an appropriate solution.

Borrowing to invest

Many Americans are familiar with the benefits of borrowing to invest. Not only can funds from a low-interest loan be invested for a potentially higher return but, the interest on the loan may be tax-deductible.

This strategy is potentially effective for investors of any age and any employment status. In addition to mutual funds, stocks or bonds, popular investments for retirees might include a home that their children can rent from them or a condominium that they might move into themselves at a later date.

Sources of cash

If you are comfortable carrying debt in retirement, there are a number of ways to borrow. Two of the most popular are home equity lines of credit and reverse mortgages. Both allow you to turn some of your home’s value into liquid assets.

A home equity line of credit gives you the flexibility to borrow as much as you need (up to your specified credit limit) whenever you want with interest charged only on the outstanding balance. Because this line of credit is secured against your house, it generally has a lower interest rate than a non-secured line of credit.

A reverse mortgage can provide either a lump sum or monthly income. In most cases, you stay in your home and don’t have to pay anything back. The interest usually accrues until you sell the home or pass away.

Reverse mortgages aren’t an appropriate choice for everyone, however. The compounded interest erodes the value of the estate, leaving less for beneficiaries. A reverse mortgage is difficult to undo - if a homeowner decides to cancel, there may be hefty fees or interest penalties.

Personal loans are a simple option for people who have a specific expense and plan to pay off their debt in a fixed amount of time. With fixed and variable interest rates available, as well as various term lengths and payment frequencies, personal loans are easily customized to your needs.

Managing debt

While debt can be a useful tool for achieving your objectives at any life stage, it’s important to manage it wisely. Your Financial Advisor can help you:

* Structure debt payments to pay off higher-interest loans first
* Monitor your debt closely, to ensure that your payments are manageable
* Review your estate plan. You may want to consider using life insurance to retire the debt when you pass away and preserve your estate for your beneficiaries
* Develop a borrowing strategy that enables you to enjoy life to the fullest

Benefit from low-interest borrowing

Your home is probably one of the most valuable assets you own. It’s also a powerful borrowing tool.

For example, with many Lines of Credit, you can access up to 80% of your home’s appraised value. Advantages of such a Line of Credit include:

* Low rate. Because the line of credit is secured by the value of your home, you’ll benefit from a low, variable interest rate
* Convenience. Once you’re approved, you have access to the cash you need whenever you need it
* Flexible payment terms.

The number of online trading companies has grown exponentially in the past few years. People looking to find a reputable broker are faced with an overwhelming selection. Obviously, some are going to be better choices than others, but how can you know what to look for when trying to find an online Stock & Options Trading Company? The following information may be helpful.

Find a Company You Can Trust

It goes without saying that trustworthiness is an essential component of dealing with anyone who is handling your money and investments, and that is just as true when seeking out an online Stock & Options Trading Company.

Practise thorough due diligence when looking for a broker. Your safest bet is to get recommendations from people you trust, and research the companies they’ve named. Go online and check the Better Business Bureau, consumer reports, and forums. You’re on the lookout for any mention of serious, repetitive problems, and also for positive information and recommendations. Go to the company’s website to examine their services and terms. If you find more than one potentially trustworthy and reliable site, take the time to compare them.

Look for User-Friendly Functionality

An easy to use and understand interface is very important for well informed, fast trading. Ensure that the company’s site is equipped with current forecasting and streaming data reports, as well as access to research and evaluation information. Stock quotes and the latest market news will help to keep you as up to date as possible.

Options and Flexibility

Consider what options are available for your use. Poke around the site or enquire as to whether or not the company offers mutual funds, certificates of deposit, and the like in their trading pool. Don’t hesitate to take advantage of any pro-offered demos and trials. It’s a great way to test drive a company, and get a feel for whether or not it’s the right one for you.

Support

Part of your research should include customer service and support features. If you’ve determined that a company seems reliable, you will also want to know that they offer anytime, speedy customer support. You need to be able to count on your trading provider to answer your questions and concerns as quickly as possible. You may have already discovered the calibre of service while you were researching the company, probably in forums.

Price Considerations

Find out the commission rates to use the services of an Online Stock & Trading Company before committing yourself. You also want to know if there is a variable or fixed rate for making trades. If you are thinking about using a free company, carefully consider what services you have to sacrifice in doing so.

If you pay careful attention to your research regarding the above points, and make yourself familiar with a company’s terms and conditions, you will be able to compare and choose the Online Stock & Trading Company that works best for you.