As you approach retirement, you may have a big mortgage balance hanging over your head. The average 60-something household has about $243,000 in outstanding mortgage debt. Paying off those loans may be a smart move for a lot of soon-to-be retirees.

Most people diversify their portfolios by allocating some of their investments to stocks and the rest to fixed-income investments like bonds. A mortgage is a fixed-income asset. There's a whole market for mortgage-backed securities, which are basically just bundles of mortgage loans.

If you have a mortgage balance, it's kind of like selling a mortgage short. In other words, it's a negative fixed-income asset.

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Source Fool.com