We’re retired, have about $350,000 in our accounts and live comfortably with

By Alessandra Malito

Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com

Dear MarketWatch,

My husband and I are retired. We have about $80,000 in a regular savings account with our bank, $10,000 in checking and a growing $257,000 in a money market account which is very low risk, according to our fiduciary investment contact. We both have a comfortable pension and Social Security and have no trouble paying our monthly bills.

We married late in life, in our mid-40’s, and have moved several times. We purchased our last home about a year and a half ago and owe $132,000 on a 30-year fixed rate.

The big question is: should we pay off our home?

Thank you,

To Pay Off or Not to Pay Off

See: I’m 49, have $1.2 million in savings and just lost my job — can I trust the retirement calculators telling me it’s OK to retire?

Dear To Pay Off or Not to Pay Off,

Paying off your home may sound like a dream, but if it’s taking a big chunk out of your savings, it could easily become a nightmare.

If you’re able to pay off your monthly bills with no issue, and you’re comfortable doing so, there’s no harm in having a mortgage. Although mortgages are debt, they aren’t considered “bad debt” like credit cards are, and while rates may be high these days, if you’re able to pay this bill without a problem, it’s not hurting you to have it.

Think about it this way. If your mortgage is $132,000 and you have about $350,000 in savings, checking and that money market account, paying off the mortgage would take more than a third of the money you have set aside.

The temptation is real though, and for some homeowners, so is the agony of having any sort of debt over their heads. If you can’t stand having a mortgage, try talking to that fiduciary adviser about it. You mentioned this person was a “contact,” but I’m not sure if that means you have a professional relationship and you’re a client. If you’re not, now may be a good time to start working with a qualified financial planner, such as a certified financial planner, who can review all of your assets and help you make sense of the best next steps.

You’re certainly not the only ones wondering if you should pay off a mortgage in retirement. This retired reader was thinking about paying off her mortgage with some of the $300,000 she had in her 403(b) plan because the interest rate was “killing” her, she said.

In response to another couple considering a mortgage payoff, advisers said paying off the mortgage can sometimes be more of an “emotional” achievement than just a financial one.

Interest rates can play a very important role in deciding what to do, other advisers said. I’m not sure what your interest rate is, but take this for example: money kept in a retirement portfolio could potentially generate returns at a higher rate than your mortgage interest rate (say 5-9% compared to a mortgage interest rate around 4%). Or, perhaps they’re about the same rate, in which case you’re breaking even. Of course, it might be a bit more difficult to weigh the pros and cons of that perspective these days, when some interest rates are hovering around 7% and we not too long ago saw unnerving market volatility.

One adviser put it as being “house rich and cash poor” — that’s when you have your house completely paid off, but little in liquid assets.

Also see: I’m 67 and retired with $57,000 left on my mortgage and $600,000 saved for retirement — should I pay off my home now?

There are so many factors to consider when making this decision though. Home equity, for instance, is a helpful resource for retirees — it may actually save some retirees who are struggling to keep up with inflation.

While you’re deciding what to do about your mortgage, take this time to also look at your finances in a “big picture” sort of way. For example, you didn’t mention how old you and your husband are, but you said you’re in low-risk assets. If it’s working for you, that’s great, but if you could potentially have decades to go in retirement, you’ll need your savings to stretch over your lifetime. Ask a fiduciary adviser if there are any strategies you can deploy to help you and your investments, while taking into consideration your risk tolerance.

Always, always have back-up plans. Social Security likely won’t go anywhere, but say there was a pay-cut to beneficiaries (Congress has never let that happen, but let’s play devil’s advocate for a moment and say it does happen in 10 or so years) — would you still be able to live comfortably and pay all of your bills? How much of your nest egg would have been dwindled by then, and how much more would you potentially have to take from it every year? How would you…