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May 05, 2007

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I'm not too keen on the idea of paying my mortgage off early. I'd rather it be in my Roth, 401, and individual stocks.

the day we pay off our mortgage, i'm doing to do the boogie woogie dance all up in countrywide and yes, i will v.tape and post it on youtube.

I've been contributing the max to 401K and IRA, and putting money into 529 plans. But I'm beginning to think I should put the minimums in 401K to get company match and invest in tax advantage mutul funds instead. I read an article recently that gave details on SS and medicare. It looks as if the govt will have to majorly increase taxes to fix the problems. So it had me thinking that 401K upon withdrawal is taxed at 24% and up depending upon income levels, while mutual fund is only taxed at 15%. I've been watching my net worth grow but I'm trying to use my crystal ball to figure out what I have to do to balance taxes and take into account what kind of financial aid my kids might be eligible for.

Ah, I still owe $200k of mortgage loan.:(

Yep, moderation is key. If you are already doing a 401k and a Roth IRA, you really ought to look into paying down your mortgage, even a little bit. I am torn because there is the definite emotional appeal in just paying the thing off, but I know that I am in no hurry to get it paid off (being that I am 26), and there are things with a better return. There is the option to do bi-weekly mortgage payments which will take it from 30 years to 22 years, but I can do that myself without the fees by paying a little extra principle each month, and setting back half of my mortgage in a high-yield savings account until the payment needs to be sent in. This is likely all I will do until my wife gets out of school. Then, we may accelerate to what the payments would be for 15 or 10 years. But, plans change, so who knows.

I am 35 years old and have payed down a $648,000 mortgage to $219,000 in two years. My income is too high for a ROTH or IRA, but my wife and I max out our contributions to SEP(up to roughly $45000/year) and our son's 529(up to 12-13K each/yr). Taxes are definitely going up in the future, and I think that the tax-deferred gains we are enjoying will be penalized more so in the future to pay for medicare and social security( those darn baby-boomers). I am in the 35% tax bracket; we make about $600,000/year in pretty stable jobs. If you were in my situation would you pay off the loan or buy low cost index funds with a long time horizon? My wife wants to keep the mortgage. I am itching to knock it out and be debt-free.

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