My father used to say that to successfully retire a person needs a few incomes and that owning a house free and clear counts as one income. For many paying off a mortgage is a pre-retirement goal.
I suppose it could if the other costs associated with the home are affordable. If they are not a home can be sold and the proceeds can be used to buy a more affordable home.
“More Americans are expected to still owe on their mortgage by the time they reach retirement. The share of Americans 65 and older with mortgage debt increased from 22 percent in 2001 to 30 percent in 2011, according to data from the Consumer Financial Protection Bureau” according to an article in Realty Times
According to the same article, loan balances have doubled and more people will be making mortgage payments after retirement or will be retiring later because of mortgage payments. A lot of it has to do with all of the refinancing and borrowing and of course with the great recession and the crash of the housing market.
One study found that older American’s did more refinancing than any other group which to be honest kind of makes sense because older Americans own more real estate.
Nearly a third of all American’s own their homes free and clear. [LA Times] There are two schools of thought on paying off a mortgage. One school says don’t do it and the other says pay it off. Personally I don’t see any advantage to owing money and paying interest on top of it but apparently, some people see it as an advantage.
Many people will hit retirement age and still have a mortgage. The good news is monthly payments may be a bargain compared with rent and are sure to be much lower than assisted living or a nursing home.
