Quote:
Originally Posted by Thrif-t
We have 10% of each of our pays put in our 401k for me and deferred comp for my DH. We have funded Roths for each of us for 2007 & 2008 so 10k each in those....like I said just finally done w/daycare and able to save a more substantial monthly amount. $700/mo goes to our emergency fund which we'll also use some of to buy a new car when the need arises, I'm hoping we can hold off a few more years.
I just am confused on what would be the best option and worried about the kids' school. I really don't want them coming out with any higher debt then a car loan..but I don't want to shortchange our retirement either.
Jim thanks for all your analysis I'll need to re-read it a few more times to catch onto all you're saying.haha Oh but I'd be leaning towards using the 30k in Roths for the next 3 years if I didn't use it for the house or 529's.
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I don't think you are shortchanging your retirement.
I would focus on rates of return.
The mortgage costs you 6.8% (5.8% after taxes). I doubt you are getting a 6.8% return anywhere right now for 2008.
Keep the 401k fully invested, then get the guaranteed 6.8% return by paying down the mortgage. Once the mortgage is paid off, use the extra cash flow to catch up the 529's (missed payments from paying down mortgage). The increased cash flow can more than make up for the missed contributions (my estimation is you could pay off mortgage in 2.5 years if you focused resources on that objective).