Most people make their mortgage payment every single month without thinking twice. They just pay it. But what if there was a smarter way to handle it — especially in retirement?
Let me tell you about something one of my clients figured out. And honestly, it blew me away.
A Client Email That Stopped Me Cold
I got an email from a client named Dave. Dave is really sharp when it comes to annuities. He owns a lot of them.
His email was simple. He wanted to know if he could use a special type of annuity to cover his mortgage payments for the next five years — and do it for less money than he actually owed.
Here’s what he asked:
“Marty, if I need $129,000 for five years of mortgage payments, could I get a five-year annuity for around $115,000 today that will deliver $129,000 over the next five years? That puts $14,000 back in my pocket with no risk. Am I missing something?”
My answer? No, Dave. You are not missing anything.
How the Math Works
Let’s break it down simply.
| What Dave Needs | What Dave Pays | What Dave Saves |
|---|---|---|
| $129,000 in mortgage payments over 5 years | $115,000 today | $14,000 |
His mortgage payment is $2,150 per month. Over five years, that is 60 payments. That adds up to $129,000.
Instead of paying that out of his own pocket every month, Dave buys a 5-Year Term Certain SPIA — that stands for Single Premium Immediate Annuity.
The insurance company takes his $115,000 today. Then they send him $2,150 every single month for five years. That covers his mortgage exactly.
When the five years are up, the annuity stops. Simple as that.
What Is a 5-Year Term Certain Annuity?
A term certain annuity is easy to understand.
- You put money in one time
- The insurance company pays you back a set amount every month
- It pays for a set number of years — in this case, five
- When the time is up, it stops
That’s it. No market risk. No guessing. No surprises.
You know exactly what is coming in. You know exactly when it ends.
Why This Works So Well in Retirement
In retirement, one of the scariest things is not knowing what comes next. The market goes up. The market goes down. You never really know.
But your mortgage payment? That never changes.
So why not match a fixed expense with a fixed guaranteed payment?
That is exactly what Dave did. And it is one of the cleanest moves you can make in retirement.
- No sequence of returns risk
- No panic selling
- No worrying about what the market does next month
Just $2,150 showing up every single month. Like clockwork.
Is This Strategy Right for Everyone?
Not always. But here is when it makes a lot of sense:
- You are retired or close to retiring
- You have a mortgage with several years left
- You have money sitting in savings that is not doing much
- You want to remove a fixed expense from your monthly worry list
The key is running the numbers. Every situation is different. But if the math works — and sometimes it really does — this can be a brilliant move.
What Most People Overlook
Here is the thing most people miss.
They think annuities are complicated. Or that the insurance company is just giving them their own money back.
But in this case? The insurance company is giving you more than you put in. You put in $115,000 and you get back $129,000. That is a guaranteed return with zero market risk.
Dave saw that. And now you do too.
The Bottom Line
You do not have to make your mortgage payments the hard way.
If you have the right amount of money and the right annuity, you can lock in five years of payments — at a discount — and put thousands of dollars back in your pocket.
That is not a trick. That is just smart retirement planning.
Podcast Episode 108: What If You Could Lock In 5 Years of Mortgage Payments at a Guaranteed Discount?
Download Episode 108: What If You Could Lock In 5 Years of Mortgage Payments at a Guaranteed Discount? on Apple Podcast