Should I pay off my mortgage before retiring? New book addresses major financial dilemmas.

• Current and prospective retirees want the most income possible.
• Is it wise to pay off a mortgage?
• A new retirement book suggests that there is no one-size-fits-all answer to big money questions.

All of us desire the highest income during retirement.

But exactly how to achieve that goal is confounding question for most people.

Christine Benz, director of personal finance and retirement planning at Morningstar, aims to provide expert solutions to the most challenging retirement queries in her new book, "How to Retire: 20 Lessons for a Fulfilling, Prosperous and Contented Retirement."

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Benz interviews retirement experts to discuss topics such as determining a safe withdrawal rate, the optimal time to claim Social Security, and whether annuities are a suitable option for increasing guaranteed monthly income.

Experts don't agree on the best approach to rewriting sentences.

Older Americans have significant equity

Should I pay off my mortgage before retiring?

As of 2022, the median home equity of homeowners aged 65 and above increased by 47% from 2019, to $250,000, according to the Joint Center for Housing Studies of Harvard University.

Some retirees are opting to use their equity instead of taking out a new mortgage when relocating.

The number of all-cash buyers is increasing, according to Jessica Lautz, deputy chief economist at the National Association of Realtors.

The trade association's 2023 annual report on home buyers and sellers revealed that approximately one-third of younger baby boomers aged 59 to 68 who recently purchased homes with all cash, while for older baby boomers aged 69 to 77, this percentage increased to 43%. Additionally, the silent generation saw a rise in the percentage to about half.

Experts suggest that legacy homeowners can benefit from reducing their mortgage debt balances, which can increase their monthly income.

Reducing ongoing spending can provide peace of mind and more flexibility with portfolio withdrawals, according to Benz.

Mortgage rates may affect payoff calculus

Benz stated that the mortgage payoff calculus may vary depending on whether individuals can earn more than their mortgage rates through secure, risk-free investments.

Although Benz and her husband paid off their mortgage more than a decade ago, what was the correct answer at that time may not be accurate now, she stated.

The decision to pay off your own mortgage, whether you're retired or not, depends on both financial feasibility and emotional satisfaction, according to JL Collins, a financial blogger and bestselling author, as stated in her book.

According to Collins, for mortgages with rates of 3% or less, it doesn't make sense to pay off the balance since better returns are available in the stock market. For mortgage rates of 6% or more, paying off the balance provides a guaranteed return. However, for rates between 3% and 6%, it depends on what makes borrowers most comfortable.

Her friend was completely against the idea of using inheritance to pay off the mortgage when Benz suggested it, she said.

"Benz said, "It's like, 'Well, why not get rid of this regular monthly bill?'" Her point was, "No, seeing my portfolio shrink by that much would feel terrible.""

Ted Jenkin, a certified financial planner and the CEO and founder of oXYGen Financial, a financial advisory and wealth management firm in Atlanta, advises clients to pay off their mortgages when it makes sense, even if they are not retired, according to CNBC.

Jenkin, a member of the CNBC FA Council, stated that many of the people he assists in paying off mortgages express satisfaction in owning their property and the security it provides.

Eliminating mortgage debt can give you the freedom to launch a business or pursue other objectives, he stated.

Jenkin stated that the argument over paying off mortgages is more about emotions and psychology than finance.

Benz discusses the importance of diversity in her book.

Emotional questions to prepare for retirement

The book's content is evenly divided between financial and non-financial topics, with both types of questions being crucial for retirement planning.

Michael Finke, a professor of wealth management at The American College of Financial Services, advises Benz that what brings joy while working may differ in retirement. Therefore, it's crucial not to view retirement as solely a time for relaxation, but rather as a chance to find something new to relax from.

What will your retirement year look like if you spend only a few days pursuing goals such as playing golf or visiting your children, asks Jamie Hopkins, chief wealth officer at WSFS Bank, to Benz.

Ultimately, retirement offers individuals a new chance at reinvention.

What would I regret not doing? Often, it's the opportunities we miss that haunt us at the end of our lives, says Jordan Grumet, a hospice doctor, author, and podcast host, to Benz.