True or False? Prepaying one's mortgage is generally seen as more beneficial than contributing to a 401(k).

Prepaying a mortgage versus contributing to a 401(k) often requires careful consideration of various financial factors. Generally, many financial advisors point out that contributing to a 401(k) can be more beneficial than prepaying the mortgage, particularly due to the long-term growth potential and tax advantages associated with retirement accounts.

When you contribute to a 401(k), especially if your employer offers matching contributions, you benefit from compounded growth on those funds over time. This means that money invested now can significantly increase in value by the time you retire. Additionally, contributions to a 401(k) often reduce taxable income, allowing for further savings on taxes in the present. In contrast, while prepaying a mortgage can save on interest costs and build equity in a home more quickly, it doesn't typically offer the same long-term potential for wealth accumulation as investing in a retirement account.

Moreover, early mortgage payment may not address other financial priorities, such as building an emergency fund or investing in other assets that could yield higher returns. Thus, the statement that prepaying one's mortgage is generally seen as more beneficial than contributing to a 401(k) is categorized as false because contributing to a retirement account often leads to better long-term financial health.