The title of this article is more ominous than its content. I don't expect you to have to decide whether you want to own a home or retire comfortably. I think you can have both -- if you plan well. But I recently ran across some interesting information about how you might want to spend your extra dollars.

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One obvious choice that many of us face when we've got some extra money to sock away is whether to apply it to our mortgage or our retirement. An extra mortgage payment is attractive, because it reduces our principal and will cost us less in interest payments in the future. It also offers a guaranteed return. If your mortgage is at 6.5%, you'll essentially earn that by not having to pay it on your principal-reduction amount. Socking the money away for your retirement is also attractive. We all know that the more we save and invest for retirement (and the earlier we do so), the better off we'll likely be when our golden days arrive.

So what's the right choice? Well, our friends at the National Bureau of Economic Research recently released a report by Gene Amromin, Jennifer Huang, and Clemens Sialm that will inform your decision. Here's their abstract:

We show that a significant number of households can perform a tax arbitrage by cutting back on their additional mortgage payments and increasing their contributions to tax-deferred accounts (TDA). Using data from the Survey of Consumer Finances, we show that about 38% of U.S. households that are accelerating their mortgage payments instead of saving in tax-deferred accounts are making the wrong choice. For these households, reallocating their savings can yield a mean benefit of 11 to 17 cents per dollar, depending on the choice of investment assets in the TDA. In the aggregate, these mis-allocated savings are costing U.S. households as much as 1.5 billion dollars per year. Finally, we show empirically that this inefficient behavior is unlikely to be driven by liquidity considerations and that self-reported debt aversion and risk aversion variables explain to some extent the preference for paying off debt obligations early and hence the propensity to forgo our proposed tax arbitrage.

Got it? It's clearly worth exploring your options a little more deeply. Tax-deferred accounts include 401(k) plans and traditional IRAs. (Roth IRAs do away with taxes altogether, though they accept only post-tax money.) In such accounts, if you've invested in aggressive stocks or mutual funds, ones where you expect to earn, say, an annual average of 12% or even 14%, you should take that into account when comparing it with the 6.5% you'd make via extra mortgage payments. (Also take into account the risks involved -- one option is much more of a sure thing.)

This topic was addressed on our Buying and Selling a Home discussion board recently. Here are some of the thoughts of our board denizens (or read the whole discussion):

DeltaOne81 made a good point, noting that if 38% of U.S. households that are accelerating their mortgage payments are making the wrong choice, "doesn't this mean that 62% of those that have accelerated their mortgage payments are doing the right thing?"

Dave Donhoff, a mortgage professional who frequents the board, later chimed in with a clarification, which then got clarified further. (Reading our boards can often be more illuminating than the original research report!)

Aj485 then offered his own perspective:

My mortgage payment (P&I) is about $1,000. To have an additional $1,000 per month expense, assuming a safe withdrawal rate of 4% ... $1,000 times 12, divided by 4%, equals $300,000. That's why I will pay off my mortgage before I retire -- it affords me the ability to retire with $300,000 less in investments, because my expenses will be $12,000 less per year.

If you're interested in home-buying and selling issues, visit our Home Center, which features lots of money-saving tips and even some special mortgage rates.

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Longtime Fool contributor Selena Maranjian owns shares ofIAC/InterActiveCorp. The Motley Fool has a fulldisclosure policy.