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.
- 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.