When It Pays to Have a Mortgage in Retirement -- and When It Doesn't

Contributing sentiments towards policy:

62% : Because the bond's 2.7% after-tax return exceeds the mortgage's 2.34% after-tax cost, the strategy of buying bonds to pay the mortgage remains the more profitable choice, said Mr. Roth.
59% : The homeowner must compare the 2.34% after-tax cost of the mortgage with the after-tax return he or she could earn on a Treasury note.
56% : The goal is to see if you can earn enough in interest after taxes to cover your continued mortgage interest.
55% : That leaves an after-tax return of 2.7%, according to Mr. Roth.
49% : However, if the homeowner doesn't receive the full tax benefit from taking the deduction, the bond's 2.7% after-tax return falls short of covering the 3% mortgage.
47% : Someone in the 22% tax bracket would forfeit 22% of the note's 3.49% in interest to taxes.
45% : Taxes can change the math on the decision to pay off a mortgage, generally in favor of paying off the debt.

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