A home fund isn’t just savings. It’s a dual-purpose system: access now, yield later. The goal is to hold liquid capital for maintenance and projects, while building enough return to erase the last years of the mortgage. You don’t need to beat the market. You need steady compounding in a tax-protected space you can actually touch.
APPLICATION
Use a Roth IRA as your core structure. Contributions (not gains) can be pulled at any time, for any reason. That makes it a rare mix: tax-free growth, but still accessible. You’ve already paid taxes on the money—now it works for both mid-term projects and long-term payoff.
Fund it every year to the limit. $7,000 per adult (as of 2025). Prioritize it before your 401(k) once the match is hit. It’s not just retirement—it’s your home buffer.
Invest it like a 15-year vehicle. Not high-risk, not high-drain. Think dividend ETFs, utility stocks, short-term bond ladders. Low drawdown, slow gain. You want a fund that climbs without needing your attention.
Set up withdrawal logic: only tap contributions, and only for property improvements with 5+ year utility—new roof, water system, insulation, structural work. No gadgets, no decor. The fund exists to lower future cost, not to patch lifestyle drift.
Tie it to a 30-year mortgage, but track against a 15-year payoff. Every year you stay ahead of schedule, the fund grows. If yield outpaces inflation and you avoid tapping gains, you’ll walk into year 16 with a lump sum that can erase the tail.
Keep a record of what comes out, what it funded, and what return it produced (saved repair bills, energy reduction, equity increase). Treat the house like an asset, not a container.
LIMIT / COST
It’s not cash. Pulling from a Roth IRA kills future compounding if you do it too often. And investing too conservatively leaves yield on the table. You’re threading a line between liquidity and growth. You won’t always get it right. But with a clear policy, you’ll avoid two common traps: borrowing for every project, and starving your future to fix today.