Paying off your mortgage and investing for retirement are two of
life's biggest and most enduring financial priorities. Most
people will live with their mortgage for 25 years and, if
they're lucky, will spend about the same amount of time socking
away savings. But there's a challenge. Everyone knows the
longer you take to pay off your mortgage, the more you pay in
interest charges. But the longer you wait to start investing, the
less time your money has to grow and the less able you are to take
advantage of the tax break offered inside a Registered Retirement
Savings Plan (RRSP).
It may look like a math problem. But it's not.
To calculate the relative advantage of paying off your mortgage
faster or saving more aggressively for retirement, you would need a
crystal ball that can predict interest rates and potential market
returns over time. Good luck finding one of those.
