AndreaCoombes

Quick, what’s the best money move you ever made?

For 40% of people aged 55 and older, it was paying off their mortgage, according to a Harris Interactive survey of about 1,540 people for Northwestern Mutual, an insurance and financial-services firm.

And 40% of the over-55 group also said starting to save early was one of their top decisions. (Survey respondents were asked “What are the best financial decisions you ever made?” and could offer more than one option.)

The survey also asked younger people—ages 25 to 54—what are the most important financial decisions they’ll ever need to make: 53% of that group said starting to save early is one of their top goals, while 52% said “making sure that my family is protected” is key.

Paying off the mortgage didn’t even make the cut for the under-55 age group. But that makes perfect sense, said Greg McBride, a senior financial analyst with Bankrate.com.

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“Paying off the mortgage becomes a higher priority later in your career, after you’ve amassed sufficient savings for emergencies, after you’ve paid off other debt, after you’ve put the kids through college, and after you’ve spent years accumulating your retirement nest egg on a tax-advantaged basis,” said McBride, who wasn’t involved with the Northwestern Mutual survey.

“All are higher priorities than pouring more money into a low-cost, tax-deductible debt like a mortgage, particularly when rates are as low as they are today,” he said.

Even near-retirees should consider focusing on retirement savings before paying off the mortgage, he said. “You’ve got to fully maximize your tax-advantaged retirement-savings options.”

Among those who haven’t yet maxed out their savings accounts, perhaps the only people who should focus on paying down the mortgage are those who are no longer claiming a tax deduction for interest paid.

“If you’re not deducting the interest, the 4% mortgage costs you 4%. If you are deducting the interest, a 4% mortgage costs you something less than that, depending on your tax bracket,” McBride said.

Real estate plays key role

In addition to paying off a mortgage and saving early and often, 29% of people aged 55 and up said buying real estate at a good price was one of their best money moves, and 27% said investing “heavily” in their 401(k).

In addition to paying off a mortgage and saving early and often, 29% of people aged 55 and up said buying real estate at a good price was one of their best money moves.

Just 2% of people 55 and older said hiring a financial planner was their best decision, according to the survey.

The idea of rebalancing one’s investment portfolio also got short shrift: Just 16% of the older survey respondents said rebalancing was one of the best decisions they’ve ever made.