Is it better to pay off house with funds or invest for retirement?

Deal Score0

I am planning to retire in about 10-12 years and have a windfall from a stock spilt. What are the advantages and disadvantages from paying down my house loan with the funds from the stock spilt or would it be better to invest the money until retirement to take advantage of writing off interest from my mortgage on my income tax? Would buying an investment property be a better solution?

1 Comment
  1. Reply
    Protector General
    June 10, 2011 at 3:26 am

    You can do a combination with the funds. For example, you can allocate 60% towards your house, and 40% towards a balanced fund for your retirement. If the balanced fund returns an 8% average annualized return, the investment will grow to $59,759.64 in 12 years, at $400 monthly mutual fund payments, as a hypothetical. I just don’t think it’s a good idea to invest 100% of your funds into the market, since that is not guaranteed money. But the money you allocate towards your house, that’s real, and if the market crashed, at least you used a portion of it towards your house. The market just simply can’t be trusted.

    Leave a reply

    Register New Account
    Reset Password