Baby Boomers are more likely to have a mortgage when they retire than the generation born between the mid-1920s and the mid-1940s, according to new research from Fannie Mae. While that trend worries some economists, other experts say post-retirement debt can be a smart move.

“The increasing prevalence of housing debt among older homeowners could compromise financial security in retirement by expanding housing affordability problems, crimping essential non-housing spending, increasing vulnerability to home loss through foreclosure, or limiting the accumulation of housing wealth,” Fannie Mae’s Patrick Simmons, director of strategic planning, Economic & Strategic Research Group, wrote in a post on the agency’s website.

Nobody wants to run out of money, especially when they’re too old or sick to work. The key to avoiding this fate, according to elder law attorney John Gosselin of Gosselin & Kyriakidis, is planning ahead. And debt – even mortgage debt – can be the difference between a comfortable retirement and an uncomfortable one.

“I work with these issues all day, every day,” he said. “Often I work with seniors whose sole remaining asset is their home. Then I end up doing estate planning for their kids, who want to avoid that fate. And I’m a strong advocate of doing the math.”

Other asset classes appreciate more quickly than real estate, so taking equity out of a slowly appreciating asset and redeploying it into one that appreciates more quickly, even in later middle age, can net homeowners more money for retirement in the long run.

“I’m a big advocate of a taking out a 30-year, fixed-rate mortgage for someone in their 50s,” Gosselin said. “In the long term, real estate is not your best bet anymore. After age 50, you can contribute $23,000 into your IRA annually, and you can do that with the equity in your home and see more appreciation because in the longer cycle, the real estate market has been flat.”

Home equity lines of credit (HELOCs) can also be effective if taken immediately before retirement. It establishes a line of credit available after retirement, when credit qualification can suffer without income, and the money is more readily available.

“If you pay off your mortgage before you retire, you now have a building with all your money in it that is worth whatever the market says it is,” he said. “And it’s probably bigger than you need. Why not rightsize, invest the difference, and use your equity to your advantage?”

Boomers are more receptive to taking out loans later in life because they have more experience with debt than their parents did, according to Gosselin. Still, he spends a lot of his time explaining to his clients that debt isn’t necessarily a negative; it can be used as a tool to create and sustain wealth.

“People think it’s a step backwards when they move into a mortgage,” Gosselin said. “I tell them not to tie up all of their money in real estate. Sell the $600,000 home and buy a $300,000 condo, but don’t pay cash. Put $150,000 down and invest the other $150,000 and put it to work for you.”

Forget Sentiment; Find Housing That Fits

Some elderly people stay in their single-family home for sentimental reasons, Gosselin said. That’s not only expensive; it can also cut into their quality of life.

“Lots of people like to go to Florida or the Carolinas for the winter,” he said. “People can spread themselves pretty thin financially if they keep the big house in the Boston suburbs. Capital gains rules are favorable in Massachusetts. I advocate not having more square footage than you need. People on the verge of retirement should think carefully about right-sizing.”

Home equity conversion mortgages (HECMs), or reverse mortgages, are another tool homeowners can use to remain in their home a little longer while accessing the equity they have in it.

Long considered an option of last resort, HECMs are increasingly being seen as a tool for financial planning during the later stages of life, especially now when interest rates are so low, said Edward Barrett, vice president of reverse mortgage lending for Salem Five. And new regulations released at the beginning of the month limit HECM use and protect consumers.

“Up until last week, you had more people who were mortgaged to the max and they used HECM as a lateral shift of those dollars,” he said. “As HUD continues to decrease the amount available of those dollars, they want it to be more of a planning tool for folks who have more equity. Instead of being used as a tool of last resort, it can be more of a pre-emptive line of credit.”

Boomer who paid for their kids’ college educations and got dinged by the Great Recession may wish to remain in the family home, but many don’t have the means to do so. HECMs can bridge the gap.

“Here’s a common example: Let’s say 10 years ago the borrowers were in a position where the mortgage was close to paid off,” Barrett said. “They have some expenses and instead of refinancing, they took out a HELOC with a 10-year interest only payment option followed by 10 years of principal payoff.  The first 10 years are manageable, but now the line is frozen and they payment goes up. That, for a lot of people, is the driver. The can’t live comfortably with that. A reverse mortgage can keep them in their home longer.”