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For you this is a judgement call, and your comfort level is a major factor, regardless of the numbers.

Your mortgage rate is 5.25%. If it was much higher, I'd say yes, pay it off, or at least refinance it. If you were a point lower, and not with an ARM, I'd be inclined to keep the mortgage in place and invest the money elsewhere. I'd be scared to have an ARM these days though. Rates are going up and likely to keep doing so.

By paying it off, you do two things:
1. You have a locked-in guaranteed return of 5.25% on the principal paid off. Compared to whatever else you might have done with it, that may not be real exciting. But it beats government bonds, and who knows what the stock market will do?

2. It eliminates the mortgage payment from your monthly budget. To most people at the stage they enter retirement mode, that can be a big deal psychologically, if nothing else.

Really, it's your call.

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