June 25, 2022

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I’m 67 and retired with $57,000 left on my mortgage and $600,000 saved for retirement — should I pay off my home now?

2 min read

I am 67 years old, single and retired at 66. After taxes, I receive $3,100 per month from a pension. After taxes and my Part B Medicare payment, I receive $2,100 per month from Social Security. I have approximately $100,000 in mutual funds/savings accounts and $500,000 in my 401(k) account.

I am able to live comfortably on the $5,200 I receive monthly from my pension and Social Security barring anything catastrophic. My pension and SS meet my basic needs and expenses, so I do not plan to tap into my 401(k) account until I’m 72 and am required to do so. There is not much left over for anything “fun,” however, as I have two adult children, one grandchild with one on the way, extra money tends to go in their direction.

My question. I own a home worth approximately $275,000 and pay a monthly mortgage of $800. I have $57,000 remaining on the mortgage. I have a seven-year mortgage at 2.65% that I refinanced in 2020, so five years remaining. Should I pay off my house with what savings I have or continue paying a mortgage until I ultimately have to move to a house with no stairs.

Thank you for any advice you may have.

See: My wife and I are in our 50s with $300,000 in a 401(k) and $700,000 in a pension. Will we have enough to ‘live a simple life’ in retirement? 

Dear reader, 

This is an age-old question and I’m glad you asked it. Many other retirees wonder the same thing as you, and may be in similar financial circumstances where they’re able to pay the bills and have money saved in their retirement accounts. 

The answer often depends on your personal situation and feelings about debt. If you can handle the fact that you owe this money on your mortgage, then it’s not bad to have it. Your interest rate is fantastic, you’re capable of making the monthly payment from just your pension and Social Security without tapping into your 401(k) and you have so much of your home already paid off — all wins. Not everyone feels comfortable having any…

2022-04-01 10:43:00

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