Conventional wisdom says you need 70 percent of pre-retirement income to keep the same lifestyle after you stop working.

That makes sense if you’ve been putting away more than 20 percent of your income in your final working years. With those savings, and no more work-related expenses for commuting and dry cleaning, you’d probably get away with a lower income.

But if you weren’t saving heavily to the end, it’s hard to see how you’ll reduce expenses 30 percent instantly at retirement unless you’ve paid off the mortgage.

In 2010, the most recent data available from the Federal Reserve Survey of Consumer Finances, 40.5 percent of households nationwide where the head was between 65 and 74 years old were paying a mortgage. But while that’s down slightly from 2007 (42.9 percent), it’s up from 2004 (32.1 percent) and substantially higher than a generation ago.

"It really started to uptick around ’95, and it’s gone pretty much consistently upward since then," said Craig Copeland, an economist at Employee Benefit Research Institute in Washington, D.C.

Why, then, don’t more people make paying off the mortgage before retirement a priority?

Copeland said a lot of things changed. Housing values went up and credit loosened at a time when many baby boomers were in their 50s. Many families did cash-out refinancings to help pay for kids’ college tuitions, or renovations.

"You see a lot of people in their 50s buying bigger houses, new houses, as their incomes went up," he said.

Guy Cecala, publisher of Inside Mortgage Financing, said in his parents’ generation, a lot of people planned to pay off their houses before they retired, then sell it, move to a smaller house in a warmer climate, which they would buy with cash and use the rest of the proceeds to live on.

"My parents, they had a house in Connecticut," he said. "They viewed that as their retirement, their nest egg. You don’t hear people doing that anymore."

But, as the mortgage numbers show, a majority of people own their houses free and clear by 65 — people like Jim and Sallie Cappadora.

Jim, 63, and Sallie, 60, paid off their Ellington, Conn., house eight years ago. If they had let their 30-year mortgage run its standard course on the house they bought in 1986, they’d have three years left to pay.

"From the very first mortgage payment, we paid an extra $50 a month toward our mortgage, and after five years, we had paid off 10 years of principal," she said.

In 1986, they sold the first house for $104,000, and bought a $158,000 house, with a $90,000 mortgage.

Sallie stayed home with their kids for eight years, but later, after she started working full time as a real estate agent, she and her husband started putting $100 a month toward the principal.

Then, in 2003, her husband lost his manufacturing job, when they had two kids in college. He had covered the family with benefits, so they had to pay $1,360 a month for insurance.

"Believe me, it wasn’t easy when he was laid off," she said. Before he lost his job, their annual earnings were roughly equal. He was out of work for several years.

The kids borrowed some of the money it cost to go to University of Connecticut, but Cappadora said she only missed five months of putting extra toward the principal in the 29 years they had a mortgage.

The last years of the mortgage, when it was $800 a month, Cappadora put far more than $100 extra in a month. Some months she would pay $2,200 toward the mortgage.

Over the years, they have done a kitchen remodeling and other interior upgrades, but when asked if they paid for the projects with a home equity loan, she replied, "Oh, no, no, no. It’s always been: If you don’t have the money, then don’t spend it. It’s the same thing with credit cards."

Copeland said it’s possible someone in his 50s could build assets faster in his 401(k) if he made the right investments than he would putting money toward mortgage principal. But, he said, "Even if you think you’re investing properly, it’s impossible to predict (the outcome)."

He said anyone who has a 401(k) employer match should be putting enough in to get that match.

But once that’s done, he says the wisest thing for a person who’s 55, who has just $30,000 in a 401(k) but also has 17 years left on a mortgage, would be to try to reduce the remaining years. If someone had a $130,000 balance at 55, at 4 percent interest, and paid an extra $175 a month, the mortgage would be paid off in 13 years and three months.

"It’s easier to work two years longer than five years longer," Copeland said.

Whether the value of the house drops or not, owning a house free and clear has the same value.

"If you can get rid of something that’s 20 percent of your budget, that is enormously beneficial," he said. "To be able to get rid of that expense is … a key choice they can make that will allow them to have an easier retirement."

Because her family paid off the mortgage well before retirement, Sallie Cappadora said they’ve been able to make up financial ground lost during the layoff. The money she used to put toward the mortgage now goes into retirement savings.

Copeland said not just because of the recession, but generally in the last decade, one in three people who retire do so before they planned to, either because they were laid off and couldn’t find another job again, or because their health prevents them from continuing to work.

"If you can get your debt paid off before you retire, that certainly makes life easier if things don’t quite work out like you thought," he said.

Curt Clemens Sr., who owns a Greater Hartford, Conn., real estate brokerage, is still working full-time at 67, and has no plans to retire any time soon. He has not paid off his mortgage yet — there are five years left on the loan, and a vacation property also still has a note. But if he needed to, he has enough investments he could pay the loan off.

For the moment, Clemens is putting more money into stocks. But he says he plans to have the house free and clear when he and his wife, an attorney, stop working.

"It’s basic financial planning. When you retire, typically your income drops," he said. "Typically your single largest payment is your mortgage."

He says he’s astonished by the number of people in his generation who have not saved much for retirement.

"There’s a lot of people that are going to be in for a rude awakening," he said. "You can’t survive on Social Security. Wal-Mart can only hire so many greeters, you know."