Don't Drag That Mortgage With You Into Old Age

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 third 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 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 statement 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.

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.

I wanted to ask McMahon what went wrong. I wanted to know how someone who reportedly earned millions in his lifetime peddling the American dream of instant fame and fortune as the pitchman for American Family Publishers' sweepstakes and host of "Star Search" could fall so far financially.

But Howard Bragman, McMahon's spokesman, said his client was tired of talking about his situation. McMahon would be willing to talk to me only about developments in his career, Bragman said.

In an interview with CNN's Larry King, McMahon did acknowledge his poor handling of his money. "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 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.