Would you save extra money for retirement or put toward mortgage debt?

[Anonymous]

Definitely do the Roth, there is minimal benefit to paying down a low rate mortgage. If you are both contributing the max to tsp/401k you should not have to do a back door, as the phaseout starts at an agi of 181k. If your income goes much higher you might have to do a back door Roth, but be careful if you have existing traditional IRAs - you may want to roll those into tsp or 401k plans prior to any back door Roth activity.

401k/tsp, then Roth, then 529 and after tax investments.

[Anonymous]

The only thing I will say is that there is nothing stopping you from doing a 30 year and doubling up the payments to pay it down early - if you ever got in trouble, you are only on the hook for the 30 year payment, not the 15 year payment.

I don't think you should do this, rather you should invest in retirement and elsewhere in the market, but just wanted to point out that you don't have to double your mortgage payment to accomplish this. We refinanced several years ago from a payment of $5100 to one of $3300. If we kept paying $5000 per month on the new loan, it would be done in 15 years.

[SUVSpot]

one of the top rules to live by, you can't borrow for retirment.

[Anonymous]

We could have gotten and easily paid for a 15 year mortgage but went with a 30 year so we could fully fund retirement (17500 each). We are betting that the rate of return on our pretax 35000 is easily going to beat paying off a mortgage early that is at an tax deductable interest rate of 4% paid with post tax money.

[SUVSpot]

SUVSpot wrote:one of the top rules to live by, you can't borrow for retirment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:i would definitely save for retirement over paying off your mortgage. your return is going to be far better in the stock market over a 30-40 year horizon. is this guaranteed? no, but i think to assume you are going to get a worse than 3% annualized return over that period of time is overly cautious.

i would invest as much as you can, as early as you can and let that money work for you. if you spend the next 10 years paying off your mortgage and neglecting your retirement savings, you are going to be behind the eight ball.

+1. You can always pay off your mortgage once you retire. I say this as someone who is retired in their 40ties.

Plus retirement protected from creditors and bankruptcy.

Huh?!? If you have creditors and have to declare backruptcy, you should get a job and not be retired.

you missed the point. if you get yourself in a bad situtation, creditors can't get to your retirement money but they can get to your house. so when you come out of it all, you will have your retirement $$$ intact. i don't think PP was suggesting that someone whose financial affairs are a wreck should retire.

Thanks PP - this is exactly what I meant.

[Anonymous]

Are you planning to live in this house forever?

What is the interest rate on your mortgage? If it's low and with historically low rates lately - then it makes no sense to pay it off rather than invest in your retirement. You are at a great age/income situation to maximize your retirement and have many years to reap returns.

[Anonymous]

I would do the Roth before paying down the mortgage, but once you've maxed out your tax advantaged space I think it's more of a personal preference.

Economically/historically, chances are you will probably do better if you can invest that money in the stock market, but many people get an emotional benefit from having their mortgage paid off, and many people are more disciplined about paying their mortgage than about investing in the market.

[Anonymous]

Invest it - just make sure you construct a balanced portfolio

[Anonymous]

Put it away for retirement - definitely!