It would have shaken my dear, deceased grandmother to her financial core.
The headline read: "Mortgages No Longer a Stigma in Retirement."
That was the finding of the annual "Affluent Boomers at 60" survey conducted by Bell Investment Advisors. Baby boomers, the survey revealed, are in no rush to pay off their mortgages.
This attitude of keeping a mortgage years or even decades into one's retirement is a major shift from what Big Mama, a child of the Great Depression, taught me. She always stressed that I should aim to pay off my mortgage before I retire, getting rid of the most significant expense in my budget.
There was a time when people would throw parties to celebrate being released from the bondage of a mortgage. But now more than 55 percent of boomers who currently have mortgages do not plan to pay their mortgages off until their 70s, if ever.
"Contrary to conventional wisdom, mortgages can actually be a wealth-building tool for boomers throughout their retirement years," Jim Bell, founder and president of Bell Investment Advisors, said in a release about the company's survey. "In addition to their tax benefits, mortgages help free up funds that otherwise would be tied up in property ownership for investment in equities."
For those seniors, wealthy or not, who are inclined to believe it's a good financial move to drag a mortgage into their old age, I've got two words for you: Ed McMahon.
Ed McMahon, Johnny Carson's sidekick on "The Tonight Show" for three decades, is trying to save his multimillion-dollar Mediterranean-style mansion from foreclosure. The Beverly Hills estate has a $4.8 million mortgage and, according to a default notice, McMahon, 85, is more than $644,000 in arrears.
McMahon acknowledged his poor handling of his money in an interview with CNN's Larry King.
"Well, if you spend more money than you make, you know what happens. And it can happen," McMahon said.
McMahon, wearing a neck brace and sitting beside his current wife, Pamela, also blamed his multiple divorces and the economy for his money woes. His troubles got worse when he broke his neck in a fall. His injury has prevented him from working, he said.
While tragic, McMahon's plight is an example of what happens when you live too large. As I wrote in my first book, "Spend Well, Live Rich," Big Mama believed in a simple principle: It's not how much you make that matters, but how you make do with what you have. If you always spend more money than you earn, you can't possibly earn enough.
Some investment advisers keep trying to convince baby boomers and the rest of us that we shouldn't pay off our mortgages. Invest that cash, they urge. But they're just trying to sell us something.
The fact is, the wisdom of Big Mama's generation about mortgages was right. They understood the risks. If you pay off your mortgage before you retire, you have more financial flexibility. You have a better chance to withstand a major illness or injury, a downturn in the economy or a drop in the stock market.
Of course, you need to save and invest, too. You don't want to be in the position of having all your money tied up in your home. If you do, you'll have to sell the home or borrow against it.
Don't listen to the knuckleheads who say keep a mortgage forever.