Negative effects of indirect amortization

How does indirect amortization affect my retirement savings? Are there any negative effects?

Greetings,

When you choose to pay off a mortgage using indirect amortization, you have to deposit enough money to cover your second mortgage into your retirement account before the account is closed.

When you close your retirement account, the relevant amount of money must be used to amortize your second mortgage in full.

Making mortgage amortization payments into a 3a retirement account may use up a substantial portion of your annual pillar 3 retirement savings allowance. You can make additional contributions towards actual retirement savings as long as total deposits do not surpass the annual limit. The amount you contribute above mortgage amortization payments is not pledged towards your mortgage, and you can use that part of your 3a assets to fund your retirement.

Best regards from Moneyguru

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