Paying off your mortgage before you retire may work well and even be an optimal choice for some that are approaching retirement or those recently retired. But it’s far from a blanket endorsement and here’s why.

Mortgage debt is low cost, often tax deductible debt. This is not 1981 when you had mortgage with a 16% interest rate, your net cost may be even close to zero on an after-tax, after inflation basis. Many people retiring already have much of their wealth tied up in the home. You may not have $300,000 dollars in your 401(k) but if you’ve lived in your home for 15 or 20 years, you may have $300,000 dollars – or something close to that –  in home equity. Why concentrate more of your wealth there? Remember this – money in the bank or in your retirement account will pay the bills, home equity will not.

If you’re concerned about the strain on your budget of those mortgage payments and thinking you may breathe easier once it’s paid off, consider a reverse mortgage. This preserves your financial assets in tax advantaged retirement accounts and still accomplishes the goal of eliminating the monthly mortgage payment. The position you don’t want to be in is house rich, cash poor.

Being mortgage free doesn’t mean living free and you want to make sure you have a sufficient nest egg to pay the bills, with or without a mortgage.