The Center for Retirement Research at Boston College has just released a research brief that addresses whether it makes sense for retirees to carry a mortgage into their retirement years.
Many retirees (20%) have a mortgage and also have adequate resources to pay-off that mortgage. The question is whether it makes financial sense to do so.
The research brief concludes that it makes sense to pay-off the mortgage unless:
- the household can earn a risk-free return that exceeds the mortgage interest rate, or;
- the household cannot satisfy its demand for risky assets without borrowing money.
Source: Center for Retirement Research at Boston College
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