Paying off a mortgage in retirement is a complex decision that depends on individual circumstances. Christine Benz’s new book, “How to Retire: 20 Lessons for a Happy, Successful and Wealthy Retirement,” explores this and other big money questions through Q&As with retirement experts. Homeowners ages 65 and over had a median home equity of $250,000 as of 2022.
Some retirees are using this equity to buy homes with all cash instead of taking on new mortgages. Reducing mortgage debt can free up monthly income, but the decision depends on factors like mortgage rates and investment returns. JL Collins, a financial blogger, suggests paying off mortgages with rates of 6% or more for a guaranteed return.
For rates between 3% and 6%, it depends on personal comfort.
Paying off retirement mortgages
Ted Jenkin, a certified financial planner, says the decision is more emotional and psychological than financial.
The book also covers non-financial aspects of retirement. What brings joy during working years may change in retirement. Retirees should consider how they will spend their time beyond just relaxation.
Retirement offers a chance for reinvention and pursuing new goals. Ultimately, there is no one-size-fits-all answer to paying off a mortgage in retirement. It depends on individual financial situations and personal preferences.
The book aims to provide expert insights to help retirees make informed decisions.
