Mortgage Or Not in Retirement

This is a question we receive frequently from clients who are about to retire.

There are pros and cons to paying off your mortgage before you retire. First, the plus side.

  • Reduces the cost of housing and increases your positive cash flow.
  • Guaranteed risk-free rate of return.
  • Psychologically, it’s satisfying.

The negatives:

  • Reduced liquidity.
  • You may be able to earn a higher return with the money invested elsewhere.
  • Potential loss of tax deduction.

There is no right answer for everyone. Be sure to consult with a financial advisor and tax advisor before making the decision that’s right for you.