In a "Ask the Debt Advisor," article from Bankrate, Inc, advisor Steve Bucci discouraged an older couple from cashing out their IRA to pay off their mortgage, instead advising them to consider a reverse mortgage.

To be clear on his point, Bucci states that exhausting the IRA to pay off the mortgage is "among the worst ideas I've heard in a long time."  He highlights the reality that people are living longer and need to preserve their retirement assets for as long as possible.  As such, it is unadvisable to cash out a liquid retirement account like an IRA, and pay off their mortgage, thereby transfer the funds into an illiquid asset, that may depreciate.

The couple, aged 67 and 70 owe $98,000 on a mortgage with a $1,700 payment.  They have an IRA worth $120,000.  Concerned about a tight budget and stock market volatility, they wondered if it wouldn't be better to use the money to resolve the debt.

Although he notes that even 6%, the couple could refinance their current mortgage to a payment below $600, saving them $1,100, he suggests that they consider a reverse mortgage.

In his opinion, reverse mortgages are too often misunderstood.  He believes in the right situation "it can be a cheap way to get peace of mind and help manage your finances."  The reverse mortgage provides the added benefit of paying off the existing mortgage and potentially providing additional income.

He suggests that the couple begin with counseling to get an overview of their options with the HECM program.