Paying off a mortgage can create a wonderful feeling of financial freedom, but it can also produce an unpleasant surprise when the next property tax bill arrives. While you had a mortgage with escrow, you may have effectively paid property taxes a little at a time because the servicer collected money each month and paid the tax authority when the bill came due. Once you’re responsible for the bill yourself, you may suddenly need several thousand dollars at once, which can be difficult on a fixed retirement income. That’s why paying property taxes in retirement deserves its own line in the monthly budget even if your local government only sends one or two bills per year. The best approach usually depends on your cash flow, local payment options, savings habits, and whether keeping the money yourself creates an opportunity or a temptation.
