Is best to pay off ones mortgage before retiring?

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I think it’s best to pay off one’s mortgage before turning 45! But given that’s not the question, I’ll repost it here then answer:

“I will retire in about 2.5 years. I have a small mortgage ,$100K. I have heard that it is best to pay off ones mortgage before retiring. My financial advisor says keep it as a tax write-off in retirement. I have about $500K in my retirement IRA. What do you advise?”

First, I’d advise getting another Financial Advisor…not because he’s right or wrong…but because you obviously don’t trust his advice! All kidding aside…think about it.

Next, since I don’t know your expect income level in retirement ala your need for a tax break…I’ll guess and say what I always say when folks ask me about
paying off a mortgage and losing the interest deduction.

“Quit worrying about dimes when there are dollars at stake.”

In your case it’s a little late to plan to pay off the mortgage with only 2.5 years to retirement. However, you could in fact look into a reverse mortgage to rid yourself
of the mortgage payment and actually get money…a lump sum, monthly installment, or a combination of both. With only $500K in IRA funds you’ll need to stretch that as far
as it will go. Augmenting your income with a reverse mortgage could be the answer.

Check out the AARP’s website for more information on reverse mortgages.

Good Luck!