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A lot of information has been in the news recently about folks buying and selling (or trying to sell) their homes.  Less focus has been paid, however, to why right now is a great time to refinance.  And the folks who should really be paying attention?  Those heading into retirement in the next decade or so.

In a report titled “Should You Carry a Mortgage Into Retirement”, Anthony Webb, a research economist at the Center for Retirement Research at Boston College finds that retired households are better off repaying their mortgage, as they are unlikely to find a return on investments that make more than they’re paying in interest every year—even when taking tax deductions into account.

Having been in the financial services industry for over 30 years, I was actually surprised to learn in Webb’s report that as recently as 2007, 41% of folks in their 60’s had a mortgage—and more than half of them actually had money that they could use to pay off their house in entirety.   But I understand why.

You see, while everyone would love to head into “their golden years” with no debt and plenty of cash in the bank, most people have to take a realistic, balanced approach based on where they are now and what they’ll need in the future.  If your home is paid in full, but your cash reserves are limited or non-existent, retirement won’t be a piece of cake.  After all, as I like to say, you can’t eat sheetrock.  On the other hand, if your savings and investments are being drained because of monthly mortgage payments, that also limits the time and resources you have to enjoy a well-earned retirement.

That’s why for those who are thinking about retirement within the next 15 years or so—especially those who have lived in their home and have a positive equity position—now is a great time to refinance to a lower rate.  And, depending on how long you have until your retirement and your ability to build long-term wealth, it can also be an excellent time to reduce the term of your loan.  By doing so, more of each monthly payment goes towards paying down principal and getting you closer to being a homeowner in the truest sense of the word—without putting you at risk of being house-poor either in the short term or longer one.

So should you carry a mortgage into retirement?  Only you can answer that one.  But whether the answer is yes or no–just remember that now is still an excellent time to make the most of every dollar by reducing your interest rate or loan term.