Your priorities may be different, however, if you're nearing retirement and your mortgage is close to being paid off. In that case, making extra payments can speed up the payoff, lowering your expenses after you leave your job. In Eisenberg's experience, "most people don't want to have debt when they retire."

Paying off the mortgage early made sense for Myrna Oliver, 64, who worked at the Los Angeles Times for more than 30 years. When Oliver was in her mid-50s, many of her colleagues were getting buyout offers. She wasn't ready to retire yet, but she wanted to be able to jump at a good offer if one came her way. To do that, she needed to cut her post-retirement expenses -- especially the mortgage on her condo in downtown Los Angeles.

"I didn't want the mortgage payments to figure into my retirement spending," says Oliver.

So Oliver began making extra payments toward her 7.5% loan whenever she got a raise, a bonus or extra money from some other source. At age 60, she paid off the loan -- eight years early -- and shifted the money to her 401(k) plan to take advantage of catch-up provisions for contributors who are 50 or older. This year, employees in that age range can kick in an extra $5,000, on top of the $15,500 that all workers may contribute.

When Oliver got a buyout offer last year, she had only three weeks to make a decision, but it was a no-brainer.

"Having the mortgage paid off gave me the freedom to take early retirement," she says -- and to take a year off to travel.