Do most retirees have their home paid off?


Editorial team Published on

Yes, most older homeowners have their homes paid off, though a growing number carry mortgage debt into retirement than in past decades.

✅ Federal Reserve Data on Retiree Mortgages

  • Ages 65 to 74: About 65% of homeowner households own their home outright, meaning 35% still carry a mortgage.
  • Ages 75 and Older: Roughly 77% own their home completely free and clear, while 23% still have a loan.
  • Historical Shift: Carrying mortgage debt into retirement has risen significantly over the last thirty years due to refinancing and later home purchases.

💡 Why Some Retirees Keep a Mortgage

  • Low Interest Rates: Many locked in mortgage rates below 4% and prefer to invest cash elsewhere for higher returns.
  • Liquidity Access: Home equity is hard to spend during emergencies, so keeping cash liquid provides a safety net.
  • Fixed Income Constraints: Large lump-sum payoffs can deplete vital cash reserves needed for day-to-day living.

📌 Why Others Prioritize Paying It Off

  • Lower Baseline Costs: Eliminating a large monthly payment drastically reduces required withdrawals from retirement accounts.
  • Tax Benefits: Smaller required withdrawals can keep retirees in a lower tax bracket and decrease Medicare premiums.
  • Peace of Mind: Eliminating debt removes financial anxiety and protects against market downturns.