New York Times: Keeping a Mortgage After Age 65?

The New York Times recently published an interesting article on evolving financial strategies for older adults. Historically, the generally-accepted view has been that paying off a mortgage to reduce expenses in later life was a sound fiduciary move. However, with current interest rates on new mortgages still doggedly high and many people holding mortgages with extremely favorable, pandemic-era rates, it may no longer make sense to do so.

The article explores the stories of people like of Brian Lindmeier, a retired purchasing and inventory manager, who at age 80 holds a mortgage at under 3 percent. Given the attractive interest rates for savings accounts and other investment instruments offered by more and more financial institutions today, the article concludes that it makes more sense for Brian and his wife Cindy to keep their money in savings and investments as they will see a better return than they would by withdrawing a large chunk of cash to pay off their mortgage.

Brian and Cindy are not alone. According to the article, “Roughly six of 10 mortgage borrowers in the third quarter of last year (2023) held loans with interest rates of less than 4 percent, according to the online real estate brokerage Redfin. Nearly a quarter had rates of less than 3 percent.”

The full article is here (subscription required): https://www.nytimes.com/2024/02/17/business/retirement-mortgage-investing.html