In today's economy, more and more people are heading into retirement with massive amounts of debt – a major part of which is from a mortgage. Today quite a few people go into retirement with their mortgages still needing to be paid, according to Wells Fargo.
Additionally, about 40% of them were planning to make some major home improvements which would actually lead to an increase in mortgage debt. Some other findings from that study (which included a survey of over 4,000 Baby Boomers) were:
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In fact, 45% of those looking to move when they retire are looking for larger homes and 56% of those will plan to take out a brand new mortgage for these larger homes.
- In the meantime Baby Boomers who are currently homeowners are still in debt for those houses. In fact, since 1992 the average outstanding balance on a mortgage for those of retirement age has grown a massive 142%
The big question though is this: Is paying off your mortgage when you retire going to be a feasible option?
The answer is not so clear. For some people who have worked hard and saved throughout their life, paying off their mortgage might be something that is a wise thing to do. They are able to afford it, so why not?
For others who may have had things come up that incurred more expenses, they may not be able to afford to pay off their mortgage and still live a comfortable life in retirement.