If you need an income stream greater than the after-tax cost of your mortgage, then paying off your house might not make mathematical sense, said Tom Anderson, author of ‘The Value of Debt in Retirement.’ Anderson added that retirees that need financial flexibility should not tie up all their money in a house because they may need liquidity in case of a crisis. He said Baby Boomers that want to help pay for their kids or grandchildren’s educations should save for their own retirement first and then perhaps use debt for their offspring’s schools. Finally, Anderson said passing on debt to heirs is not necessarily a bad thing as long as the assets in the estate outweigh the debt.
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