One of the most common questions we get is whether to put savings toward paying off a mortgage vs. investing more for retirement. This question is tricky because the answer can vary depending on which stage of life you’re in. Are you in the accumulation phase of trying to build wealth or in the distribution phase of using that wealth to generate income?
The Accumulation Phase
First of all, make sure you have an adequate emergency fund before paying down your mortgage. While paying down your debt may make you feel safer, it’s actually safer to have some money in savings that you can use to continue making those mortgage payments should Murphy’s Law kick in. Even if your mortgage is paid off, you’ll need emergency savings to keep the lights on, food on the table, your car in the driveway, and gas in that car if something happens to you.
Damian J. Sylvia
Managing Partner
Retirement Income Solutions
