So many questions arise when approaching retirement age. “Should I sell my large family home and buy a smaller home?” “Should I change my spending habits now to prepare for a lesser income?”  “Should I pay down my mortgage only to deplete my savings?”

Let’s focus on your mortgage. Which is better?: To retire without a mortgage or keep the mortgage and retire with a bigger nest egg?

More Americans approaching retirement face what some describe as worrisome levels of debt, especially mortgage and credit card debt.

Consider: More than half (55 percent) of Americans between the ages of 55 to 64 carry a home mortgage, and about the same fraction (50 percent) have credit card debt, according to a paper presented at the 15th annual Joint Meeting of the Retirement Research Consortium held last month in Washington.

What’s more, that debt isn’t going away after retirement. Among people ages 65 to 74, almost half had mortgages or other loans on their primary residences, and more than a third held credit-card debt according to the paper, “Debt and Debt Management among Older Adults.”

And that debt can be a problem, especially for those who are less financially literate, according to the authors of the paper, Annamaria Lusardi, a professor at the George Washington School of Business, and Olivia Mitchell, a professor at the Wharton School, University of Pennsylvania.

Such debt can be hard to pay off during retirement, especially in the absence of earned income. Plus, in the worst of cases, such debt can lead to bankruptcy according to Lusardi, who, along with Mitchell, is the co-author of “Financial Literacy: Implications for Retirement Security and the Financial Marketplace.”

Given the problems that debt can cause in retirement, we thought it worth asking the following questions: What’s the better tactic? To aggressively pay down one’s mortgage down before retirement and stop or perhaps reduce one’s savings for retirement? To keep saving for retirement and retire with mortgage debt? Or should you split the difference — save a bit less for retirement and pay down one’s mortgage a bit more aggressively?

Well, as with most things having to do with money, the answer depends on your personal situation. “My answer would be that it depends on the facts and circumstances,” Mitchell said.

Not surprisingly, many agree with Mitchell that it’s impossible to decide without crunching the numbers whether it’s wise to pay down your mortgage before retiring at the expense of saving less retirement. “I do not think there is a general advice to give without knowing more about personal circumstances,” Lusardi said.

And Kathleen Mealey, a financial counselor with Cabot Money Management, is in the same camp. To begin to answer the question, she said you need to assess how ready you are for retirement today given your current savings and your goals and plans for the future.

Others share that point of view. “The question is not a simple one to answer as there are a number of variables that would come into play,” said Mike Kenney, a consultant with Nationwide Financial.

Those variables include current income, current savings, current tax rates, your Schedule A itemization before and during retirement, whether you have access to a Health Savings Account, your retirement income needs with and without a mortgage, your mortgage balance, the number of years remaining on your mortgage, and interest rates and opportunities to refinance — among many other factors.

Earlier this year, a survey showed that most people think paying off their mortgage was among the smartest financial decisions they ever made — along with starting to save when they were young.

The tax consequences of pursuing one tactic or the other must also be considered. “They are tax advantages to pension contributions, and interest payments on mortgages are tax-deductible, so one has to compare these advantages,” Lusardi said.

Mealey agreed, saying that contributing to a 401(k) and deducting interest payments from a mortgage could be beneficial, especially if it puts you in a lower tax bracket. “If the answer will be a combination of both 401(k) contributions and paying off mortgage, work at keeping tax brackets low,” Mealey said.

A word of warning: You are likely to lose much of the benefits of deducting mortgage interest payments the closer you are to paying it off in full. Also, consider this fact: You do get a tax deduction with your 401(k) contribution. But the deduction only defers your taxes, noted Michael Kitces, publisher of Nerd’s Eye View, partner and director of research for Pinnacle Advisory Group, and a RetireMentor at MarketWatch.

Mealey and others also suggested that you pursue the tactic that offers the highest return on your investment. “What is the mortgage interest rate and length of time remaining?” she asked. “Compare this with the 401(k) investment options. If the long-term rate of return on the 401(k) plan will be higher than the mortgage and there is a comfort level with the risk involved, it may not be advantageous to pay off the mortgage.”

For some, this is a no-brainer. “With current low interest rates that are fixed for a number of years, a retiree can possibly have a better return on the money in a long-term objective portfolio than the 3 or 4 percent interest payment,” said Michael Callahan, president of Edu4Retirement.

On the other hand, if you aren’t earning much on your retirement investments, if you have low or negative returns, it might make sense to pay down your mortgage, Mitchell said.

“If one is holding assets in a money market mutual fund earning 0.5 percent while paying 5 percent on his or her mortgage, paying down that mortgage may be a clever strategy,” Lusardi said.

article contributions from R. Powell