Many financial planners recommend it: pay off your mortgage by the time you retire. Being mortgage-free in retirement allows you to relax more; you can forget about housing debts.
Unfortunately, many still end up having monthly mortgage payments well into their retirement. As much as 26 percent of retirees still have active home loans, even here in Utah, yet having a mortgage in retirement can also be a benefit.
Before retirement, you can aspire to pay off your mortgage entirely. Some may say that investing your money will be better, but paying off your mortgage will be better. Your savings from a paid off mortgage will amount to more than what you will probably receive from investments.
Remaining Mortgage in Retirement
Of course, you also have to consider that you may still have your mortgage come the time you retire. Compared to credit card debt, however, home loans have significantly lower interest rates than credit cards. When you have both mortgage and credit card debt, you can tackle your cards first before you tackle the mortgage. A mortgage can be paid more easily than credit card debt.
Continuing Tax Deduction
Another perk of a mortgage in retirement is the tax deduction. You already enjoy a tax deduction currently with your mortgage. You can continue to enjoy that tax deduction well into retirement if you still have your mortgage. The deduction will be lower than the deduction at the beginning of your mortgage term, but it remains a deduction nonetheless.
More Stability in Mortgage
Now, in retirement, you may be thinking of downsizing and renting as you sell your Utah home. Renting, however, has its risks such as the instability of rental fees. Your landlord or landlady may increase the fee whenever your lease agreement ends. At the same time, living in your home with a mortgage offers more stability than renting out.
As you plan for retirement, you can do your best to pay off your mortgage. Even if your mortgage remains in retirement, however, you can still enjoy some benefits.