Katie Coleman, an Ameriprise financial adviser in Hauppauge, says she...

Katie Coleman, an Ameriprise financial adviser in Hauppauge, says she prefers that people contribute more to their retirement plan to ensure they maximize available benefits, such as company matches, than accelerating paying off mortgages. Credit: Getty Images/iStockphoto

There are all sorts of tenets about retirement. One of those that's often touted is that you should pay off your mortgage before you retire. For sure, it makes sense, but there are always exceptions to the rule.

Here are some cases where it makes sense to carry your mortgage into retirement.

Step up retirement savings instead

“I would rather see people save more money into their retirement plan to make sure they maximize their available benefits, like a company match, than accelerating paying down the mortgage,” says Katie Coleman, an Ameriprise financial adviser in Hauppauge.

Consider taxes

Keep the mortgage if the interest rate is reasonably low and you’re still itemizing under the new tax laws and are getting the mortgage interest deduction, says Debra Taylor, founder of Taylor Financial Group in Franklin Lakes, New Jersey.

Also, if your mortgage rate is lower than after-tax returns on your investments, it doesn’t make sense to pay down the mortgage early, says Michael Tanney, managing director of Wanderlust Wealth Management in Manhattan.

Pay off higher-interest debt

“It’s worthwhile to pay off high-interest rate debt first and wipe bad debt out before you accelerate paying off the good debt, like a mortgage,” says Coleman.

Start with debt that has the highest rate and work your way down. “Usually the mortgage is one of the lowest rates available, but conceptually people want to pay it off first because it is the largest payment and they want it wiped out," says Coleman.

Tanney points out that the type of mortgage and how many years remain make a huge impact on how best to tackle debt repayment as you wind down toward retirement. There is no one-size-fits-all answer for everyone.

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