How saving for retirement beats paying down your mortgage – Globe and Mail

Jeff Evans

Today’s Globe and Mail website features an article on the debate between using extra funds to pay down your mortgage vs. saving for retirement via RRSP’s in particular. It argues that the low rates of mortgages make it advantageous to invest instead of paying down debt.

I do have mixed feelings about this stance, and at very least I would say it is up to an individuals personal circumstances. I have often believed that paying your mortgage should be the last thing to do once every other need has been met. However, the expression “make hay while the sun shines” also comes to mind with me. Rates are low today, but they will increase at some point in the future.

On the other hand, there are tax advantages to RRSP’s and if you have a good investment that you are comfortable about and sure of, then maybe that is a better way to go. However, based on some experience and observation, I am now somewhat skeptical about passive investments, whether they will be with a chartered bank or a private company. There are exceptions and that is where it really is up to an individual’s circumstances. It seems to me some combination of the two would probably make sense to many people.


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