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I am 37 and have 27 years left on the mortgage. If i have a few extra dollars regularly should i put it on the 401k or the mortgage. one of my goals is to have the house paid off before retireing. mortgage is at 6.125% int. and 401k is losing right now.
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How much are you putting in the 401k right now, on a percentage of your household gross income? Do you have other retirement accounts that you contribute to? What is your total retirement nest egg?
The more information you can give us the better, but generally the fact that your 401k is down is not a good reason to stop contributing. In fact down periods present good buying opportunities, so you should bump up your contribution. -
If you plan on living in that house for the rest of your life than paying off your mortgage is a good goal. You are very young though so chances are that may not happen. Probably good to focus on your 401k.
My 2 cents.Comment
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It is almost always better to invest rather than prepay your mortgage.
Your mortgage is at 6.125%. If you are in the 25% bracket, the actual rate after the deduction is about 4.6%. You don't need to be an investing genius to outperform a 4.6% return in your 401K.Steve
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I put 8% into the 401k I don't itemize because i'm lower income with cheap house and my interest last year was 2500 (about) my mortgage pmt is 246 / mo (just prin. and interest-not including escrow which brings it too 410/mo) My thing is my mom is giving up her house to go to subsudized apartment because she still has a mortgage and cant afford that and the utilities. at 74 she doesnt want to get a job. So i want mine pd off before i retire. I do plan on moving in about 6 years when kids are done with school but the house i choose will be a small fixer uper with low pmt. or i wont do it. and i will finnance that for only 20 yrs if possible.Comment
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401k- 6.125% return is easy to beat in 401k.Comment
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