“Should we pay our rent 2 to 3 years ago?” Suz Orman says no, “A large group of reasons”

When you feel uncertain – especially during retirement – it may be tempting to lock a sense of safety. As for the couple, this meant the question of whether they should pay prior to renting them for the next two or three years using a work reward. But the financial expert Suz Orman He says this step can cause more problems than it is solved.

On a The last episode From the podcast “Women and Money”, Orman and her partner, KT, read a question from a listener named Linda. I asked Linda and her wife, both recently retired at the age of 73 and 70, whether they should use a recent bonus to pay several years of rent in advance. The couple had already had $ 600,000 in a varied investment portfolio and they were hoping to avoid drawing from it until 2028.

Orman’s answer? No company.

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“The rent is the keyword here,” KT quickly said after reading the question. Orman agreed – and when he called “a large group of reasons.”

One of the biggest concerns is that the pre -rent does not give you anything in return – it does not build arrows like a mortgage, and does not improve the value of the original. It is simply spent money, in advance, to a place you do not own. It can become a problem if your circumstances change.

Orman is not against renting himself. In fact, it was recommended in certain situations. But handing over more than two or three years of rent in advance during retirement raises red flags. Here why:

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• Life changes occur. Nothing can happen to you or your partner during the next few years. If you are paying now and changing plans – due to health, transportation or other conditions – you may not be able to recover your money.

• Angel can also change. “Who pays the rent?” He asked Orman. “The owner.” Real estate owners can sell the conditions of the lease, or they will be disappeared or die. This may complicate things – especially if rent payments are made years ago.

• You can work hard elsewhere. Instead of closing it for rent, Orman suggests keeping it in a safe account and according to interest such as the Money Market Fund. In this way, it is still available if necessary and earn something in the meantime.