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Home Mortgage Prepayment: The Better Roth IRA?
- Source :
- Journal of Financial Service Professionals; Jul2009, Vol. 63 Issue 4, p36-48, 13p
- Publication Year :
- 2009
-
Abstract
- Workers often have a wide array of corporate- and noncorporate-sponsored plans that allow them to save for retirement on a tax-advantaged basis. The prepayment of a home mortgage, which is most similar in character to the Roth IRA, is usually not considered a tax-advantaged retirement savings option, perhaps because investors do not see or comprehend the future revenue or retirement resources (cash flows) prepayment creates. Our comparison between the prepayment of a home mortgage and contributing to a Roth IRA is strictly from a wealth maximization standpoint. Mortgage prepayment is found to be an effective and essentially equivalent alternative to a Roth IRA, especially for people no longer eligible for Roth contributions due to phase-out rules. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 15371816
- Volume :
- 63
- Issue :
- 4
- Database :
- Complementary Index
- Journal :
- Journal of Financial Service Professionals
- Publication Type :
- Academic Journal
- Accession number :
- 42999226