You sound surprised that she’d still be in the stock market at her age. In my mind, that’s not a bad thing at all. It might not be what the typical financial planner would tell you to do, because for the most part, they’ll try to get you to be super-conservative with your money as you get older.
But from the way you’ve described things, it sounds like she’s not planning on using this money, but using the income from the money. If that’s the case, she won’t whittle it all down to nothing.
Paying off the house early
So, if she’s in good mutual funds—not single stocks—I think she’ll be just fine. Now, let’s talk about the mortgage. I would absolutely recommend she go ahead and pay it off.
If she can do that at age 76 and still have $540,000 left, that’s the way to go. Let’s pay off the house, and then she can start taking her income off a percentage of the remainder. She won’t need much with the house payment out of the way because she won’t be sending money to the bank anymore.