Should You Pay Off Your Mortgage in Retirement? Key Insights for Financial Planning

Christine Benz’s new book delves into essential money questions for those approaching or living in retirement, including whether paying off a mortgage is a wise financial move. The decision to pay off a mortgage during retirement hinges on various factors, such as income stability, interest rates, and personal financial goals.

Benz emphasizes that retirees should carefully evaluate their financial situation to determine if using their savings or investments to pay off a mortgage aligns with their broader financial security. The pros of paying off a mortgage include reducing monthly expenses and achieving peace of mind from being debt-free. This can be especially beneficial for those with a fixed income, as it simplifies budgeting and reduces financial pressure.

However, there are potential downsides, such as losing liquidity and diverting funds that could be invested for higher returns. Retirees need to weigh whether the interest rate on their mortgage is low enough that their money would work harder if invested elsewhere. Maintaining a balance between financial flexibility and reducing debt is crucial for a secure and comfortable retirement.

Benz’s insights provide retirees with a framework to make informed decisions that align with their financial goals, ensuring that paying off a mortgage supports their long-term retirement strategy.

Source:

• CNBC – Should You Pay Off Your Mortgage in Retirement?