My mom is 76, and her only debt is about $60,000 left on her mortgage. She has $600,000 in retirement accounts and a long-term care insurance policy, but she has just $25,000 in a money market account with check-writing privileges for everyday bills and purchases.
To be honest, this worries me. She has always lived within her means, so am I wrong to be concerned? She has also been talking about paying off her mortgage, and I’m not sure how I feel about that, either.
I’d love your opinion. 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.
Paying off a mortgage in retirement
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 super-conservative with your money as you age. But from the way you’ve described things, it sounds like she’s not planning on using this money but using the income from it.
She won’t whittle it all down to nothing if that’s the case. 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 that she 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 a percentage of her income off 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.