Fed Says It's Better to Invest Than Pre-Pay Mortgage
Nov 30, 2006
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By Elaine Floyd, CFP®
Clients got an extra dollar? Don't let them use it to pay down the mortgage, says a recent Fed study. They'll earn at least 1% more a year by investing extra cash in their retirement plan rather than their home. It's a tax arbitrage strategy that benefits almost every client, but especially those in the higher tax brackets.