Peace of Mind
Paying off your mortgage before you stop working could help provide you with peace of mind. But there may be better uses for your money, at least in the short term. If you have credit card or other high-interest debt, pay it off first. And take care of your retirement savings. Your remaining years on the job represent your last chance to put away money in tax-advantaged retirement accounts. Finally, you should have an emergency fund so you’re not forced to use retirement accounts to cover unexpected expenses.
Keeping your mortgage has other advantages, too. A balanced investment portfolio has a good shot at beating the low rates on mortgages now. And if you itemize deductions, the after-tax rate on a mortgage is even lower.