Скачать или смотреть 4 Reasons Tax Shelters Beat Mortgage Paydown 🧾🏠

💡 Mortgage payoff vs retirement funding: which wins when cash is surplus? 💸🏠

Summary:
This article tackles a common investor dilemma that arises when you have extra cash: should you pay down a high-interest mortgage or maximize tax-advantaged retirement space, especially when you have dual income streams (W-2 and self-employed/independent contractor income) and access to accounts like Solo 401k. The core idea is that a high mortgage rate near 7% acts as a guaranteed, risk-free return equal to the after-tax cost of debt. Paying the mortgage provides immediate psychological relief and reduces long-term interest, but it may forego decades of compounding growth available in tax-advantaged accounts, where contributions to traditional 401k, IRA, HSA, and notably Solo 401k employer contributions can dramatically accelerate savings over 10–30 years through compounding.

The article argues that most financial experts favor maximizing tax-advantaged space over aggressively paying down debt. The main benefits are: (1) tax savings from pretax contributions reducing current taxable income, (2) the time value of money—lost years of tax-deferred growth can’t be recovered later, and (3) growth potential from investments in tax-advantaged accounts often outpacing the mortgage’s guaranteed return, especially if future market performance strengthens or refinance options become available. A key nuance is the Solo 401k, which adds an employer contribution lever for self-employed individuals, expanding the tax-advantaged space further.

Actionable strategy: adopt a hybrid approach. First, max out the remaining tax-advantaged buckets (e.g., Solo 401k employer contributions and other available tax shelters), then allocate any remaining surplus toward mortgage payoff. This preserves tax benefits and compounds over time while still reducing debt.

Liquidity and flexibility matter: home equity is relatively illiquid and can be expensive to access, whereas retirement accounts offer greater long-term flexibility and protection from housing market volatility. The recommended mindset is to maximize tax benefits and time in the market now, with the option to refinance or accelerate debt repayment later if priorities or rates change. In short, a tax-focused, hybrid approach generally outperforms a pure mortgage payoff when rates are high and tax shelter opportunities are abundant.

Keywords: personal finance, retirement planning, tax-advantaged accounts, Solo 401k, 401k, IRA, HSA, mortgage paydown, mortgage payoff, debt payoff, investment strategy, guaranteed return, compounding, time value of money, tax savings, traditional 401k, refinance, liquidity, market returns, financial planning, wealth management.



00:00 Title
00:35 Agenda
01:00 Disclaimer
01:19 Dilemma
01:45 7% vs Growth
02:25 Tax Shelters
03:10 Limits
04:10 Hybrid Steps
05:06 Compare
05:46 Timeline
06:25 Liquidity
07:03 Quick Math
07:52 Quiz 1
08:18 Answer 1
08:32 Quiz 2
09:06 Answer 2
09:25 Key Points
09:58 Summary
10:34 Thanks