Experts 'Okay' Retiring with a Mortgage

According to Jim Weiker’s article in The Columbus Dispatch, experts claim that carrying a home loan into retirement is not all the bad. An increasing number of people are keeping a mortgage longer than a job, and the amount of retirees holding a mortgage has skyrocketed from 26.4% in 1989 to 65.7% in 2012 for homeowners 64+. Likewise, the average mortgage debt held by people between 65 to 74 of age nearly tripled from 25,900 in 1989 to $70,000 in 2010, according to the federal Survey of Consumer Finances. Theories on the topic vary. Some claim that these statistics reflect “people living beyond their means and failing to save for retirement.” Others argue that debt is “simply a fact of life, not something they expect to end.” The survey revealed additional noteworthy statistics: 36% of those surveyed expect their debts to succeed their assets following retirement. Recently low interest rates support peoples’ decisions to purchase home they may be unable to finance. Senior analyst with Bankrate, Greg McBride, mentions that there is no incentive for retirees to pay off their mortgage. Paying off a low-rate, often tax deductible debt is not most people’s top priority (whereas credit card, for example, is).

The bottom line: if you have enough cash flow to support the mortgage payment, it’s perfectly fine to hold a mortgage after you stop working. But if you don’t have the necessary income to support the mortgage during retirement, it’s probably a good idea to sell your home. If you’re in this position, please consider letting me be your real estate agent. I’m very experienced with senior homeowners, and would be glad to help you sell your home.