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Retirement planning often includes the goal of eliminating mortgage payments before leaving the workforce behind. This approach is based on the idea that it’s easier to make ends meet in retirement by reducing expenses and not having to deal with a mortgage while on a fixed income.

But is eliminating your mortgage always the best approach? Some experts suggest there may be downsides to using significant financial resources to pay off a home loan. What’s more, there may actually be benefits to bringing a mortgage into retirement—including using the interest payments as a deduction on your annual tax bill. 

Still, this may not be the best move for everyone. The most important factors to weigh are your mortgage interest rate, expected retirement income, and how much liquidity you’ll sacrifice to eliminate your mortgage.

When it might not be make sense to carry a mortgage into retirement 

For many retirees, being free of mortgage payments in time for retirement is becoming a thing of the past. The oldest segment of baby boomers—individuals born between 1946 and 1951—are far less likely to have paid off their mortgage prior to retirement, according to TIAA. And in some cases, that may be a deliberate decision.

About 30% of TIAA clients in retirement or within one year of retirement continue to maintain a mortgage.

“While the goal for many retirees is to minimize the amount of debt they have during their retirement years, there are pros and cons to having a mortgage in retirement,” says Jarrod Fowler, head of TIAA’s investment and advisory center.

There are various scenarios in which paying off your mortgage aggressively may not necessarily be the most advantageous financial decision. 

If you have a low mortgage interest rate, investing might be the better option

Individuals who purchased a home or refinanced their mortgage prior to the recent trend of interest rate hikes are likely to have locked in a very low mortgage interest rate—perhaps in the 3% range.