Should Older Clients Pay Off their Mortgages? | Retirement Planning content from WealthManagement.co

Are you in denial about your older clients’ mortgage debt? Pre-retired households are carrying larger mortgages in the wake of the housing bubble and bust, and many are carrying that debt into retirement.

Consider these statistics:

● AARP reports that 53.6 percent of households age 55-64 carried a mortgage in 2010, compared with 37 percent in 1989; among households age 65-74, the figure jumped to 40.5 percent from 21.7 percent. Meanwhile, the median value of mortgage debt among the 55-64 crowd soared to $97,000 in 2010, up from $33,800 in 1989. For households age 65-74, median loan values soared to $70,000 from $15,400.

● The media loan-to-value ratio among homeowners age 50-59 jumped from 10 percent to 38 percent between 1989 and 2010, according to the Joint Center for Housing Studies of Harvard University.

The figures show many households are overweight in real estate due to the run-up in housing prices prior to the bust. Many families invested in larger, more expensive homes or undertook renovations and expansions, and they’re carrying big debt loads.

via Should Older Clients Pay Off their Mortgages? | Retirement Planning content from WealthManagement.com.