Most young homeowners have mortgages. Consequently, they hand over a substantial sum of money each and every month toward the eventual ownership of their home. This can, and usually does, go on for decades.
Does a Mortgage Help You Save for Retirement?
The best way to save for retirement is a 401(k), regular IRA, Roth IRA, or combination of all three. Unfortunately, many folks fail to take advantage properly of these retirement accounts. On the other hand, you must pay your mortgage. As a result, a mortgage becomes the default forced savings program. Often, it is the only savings plan people have.
While not ideal as the sole source of retirement funding outside of Social Security, a paid-off or nearly paid-off home can be a tremendous asset when reaching retirement age. Either by downsizing to a less costly home or by taking out a reverse mortgage, your mortgage indisputably builds up wealth you just might find handy (or, in a worse case, necessary) when it's time to permanently call it quits.
Indeed, a mortgage helps you save for retirement.