I paid off my mortgage several years ago.
As a specific, at-the-margin financial decision, it was a very bad one. Clearly my net worth would have increased more rapidly had I left it all in the market. Moving much of my kids college fund into a college-inflation-matched 529 program was also a bad decision.
At least that's all true as of this writing. Past performance is no guarantee of future results.
I also believe the "low interest rate" theory is a red herring. Paying off the mortgage is a guaranteed rate of return. When compared to other guaranteed rates of return (Treasuries), net of taxes, its a push. People have been trying to time the interest rate market for years on the theory that interest rates HAD to go up a lot and therefore holding a low interest mortgage was a good idea. As history shows, timing the market is not possible.
Of course history would also say that over the very long term term, keeping the mortgage would be a better idea.
The reality is that paying off the mortgage was as part of my overall portfolio plan. Having the mortgage gone has given me the comfort to be more aggressive elsewhere. Same for the protected 529s.
IMO, the trick to these things, as always, is:
1) Have an integrated plan
2) Don't try to time the market on any asset
3) Know your risk tolerance
4) Know your time horizons
In your situation, I don't think I would pay off the mortgage. You're close to retirement, your nest egg is not large, and liquidity strikes me as very important. Of course, you also shouldn't go crazy on risk right now, so your total returns will likely not be that high.
My $0.02...that was more like $0.05 I guess!