According to the theory, to achieve a comfortable retirement, you should not only be mortgage-free by age 65, but you should have a reduced debt level by 45.
The recommendation is to have a debt-to-income ratio of 1 at the age of 45, and then gradually reduce it to 0 by age 65.
A ratio of 1 would mean that, if you earned $100,000/year, your total debt (including mortgage, credit cards, car loans, etc.) should not exceed $100,000.
The Tribune article interviewed a financial planner who agreed with the advice - he says he tells clients that their home is "an asset, not an investment". The reason for this is that investment dollars are for living off of during retirement, but it is unrealistic to expect people to sell their house for retirement and move somewhere cheap.
I think this is pretty good advice. I think mortgage debt is something to avoid in retirement because a mortgage payment is fixed, while your retirement income, unless it is 100% social security and/or a fixed pension, will fluctuate with the market.
Also, I think it is unrealistic to expect people to downsize in retirement. My parents and my wife's parents, who are all retired, are proof of this.
We both tell our parents that they would be more comfortable downsizing to a smaller house or condo, but they are set in their ways, and attached to their homes.
The fact that they are mortgage free really helps their finances.
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