Most financial industry professionals estimate Americans will need to save the equivalent of 70% of their annual income in peak career earning years to put aside for every year of their retirement. That's an amount that should get most Americans comfortably through their golden years.

The problem? Most Americans aren't getting to that benchmark 70% retirement income figure - not even close. Data from a 2016 study show that only three U.S. states have average retirement incomes are over 70% - Hawaii, California and South Carolina.

That leaves an alarming 47 states where U.S. seniors are struggling to live on a stretched-out income.

One option for senior homeowners at the top of the list is refinancing their home's mortgage to lower monthly payments and add cash to the household coffers. That move has its pros and cons, as financial industry experts say refinancing really depends on personal financial circumstances.

"Paying off a mortgage isn't always possible and refinancing doesn't mean that one is taking money out of the house," says Deirdre Woollard, a realtor with Lion & Orb in Berkeley, Calif. "If the cost of refinancing reduces the payments enough to make a significant difference, then the answer is "yes" as long as the cost is taken into consideration. If there isn't a big enough drop in payments then it might not be worth the cost."

That seems to be the consensus among real estate and mortgage experts, who say "timing" is the big issue.

"In general, if you're looking at a steep drop in monthly income after you retire, then you can reduce your monthly payments by refinancing," says R.J. Winberg, a real estate expert in Orange County, Calif. "However, if you only have a couple years left, then it may be best to just wait it out and pay the mortgage off, rather than adding more years of payment obligations."

To figure out which scenario works best for you, Winberg advises asking yourself three key home-ownership questions:

  • How many years of payments do you have left?

  • How high are your payments now?

  • What can you afford now vs. after you retire?

If you answer the above questions and do decide to refinance, taking a creative, even offbeat, approach to the refinancing issue makes sense.

"If it looks like your retirement income is going to be significantly lower than your current income and you're 10 or more years away from retirement, then there is another option to consider," Winberg notes. "You may want to refinance into a 10- or 15-year mortgage loan in order to pay it off by the time you retire."

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"While this might increase your payments, you'll only have to make these payments while you are still working and earning a higher income and you'll have no mortgage when you retire," Winberg adds. "Another advantage of this strategy is that a 10- or 15- year mortgage will typically have a lower interest rate."

It's not always personal income needs that come into play for a homeowner in his 50s or 60s. With Americans today having kids later than their parents and grandparents did, student loans are a big household financing issue, too - one that can be adequately addressed with a mortgage loan refinancing deal.

"The cost of student loans are so incredibly high that it's prompting people in their 50s and 60s - the age at which most people would have a kid in college or just out of school - to think about refinancing to pay off that big student loan debt," states Kimberly Sheppard-Hope, a senior loan officer at Quontic Bank in Melville, N.Y. "The interest rate on a mortgage is so much lower than that of a typical student loan that a lot of people are trying to knock out the student loan debt before they pay off the mortgage. Consequently, refinancing helps bring down the costs, at least in the short-term."

Cost-wise, student loans interest rates are much higher than what mortgage rate interest payments, says Sheppard-Hope. "Thus, many middle-aged Americans look to refinance their mortgage to get the lowest available rate possible - at or around 4.0% to 4.5% on their mortgage as opposed to 7%-to-8% rates on student loans," she says.

Another reason to refinancing at a relatively older retirement age - to buy some time.

"People in their 50s and 60s typically have a lot of equity in their home, but they might not plan on retiring there," says Sheppard-Hope. "So, they want to get their money out of their house for the short-term by refinancing and then after they retire, move somewhere else."

"Many older New York move out of the area after they retire because the cost of living is so high," she adds. "So they sell their house and move down south where the cost of living is lower and the weather might be warmer."

For 50- and 60-somethings mulling a home loan refinancing, the best move is to talk to a professional, get a grip on just what you're looking for, money-wise, and proceed carefully with your eyes wide open.

"Speak with a qualified loan officer who asks you the right questions, so you can make the best decision for your life and long-term financial plans," says Jennifer Beeston, a loan specialist at Guaranteed Rate Mortgage in Santa Rosa, Calif. "Figure out your needs, too. Is the goal to make the payment as low as possible or pay off the home as quickly as possible?"

Answering that question may be the best driver of them all, in deciding whether you want to refinance your home later in life - or not.

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