Pay down my mortgage, continue with 401k investing, or invest elsewhere...

Submitted by twelfxtwelf t3_1275pn5 in personalfinance

I'm 47 and I currently owe $256K on my mortgage. I refinanced in 2016 for 3.9% on a 30yr loan set to mature in 2046 (I'll be 71yo).

I'm currently putting the yearly maximum in to my 401K/Roth and have been doing that for years (401K is just over 1M). I also put $13K a year into our employee stock purchase program to buy stock at a 15% discount. All of this totals to about $2200 a month while leaving my 401K at the company match level.

According to the calculators.... If I put the additional $2K towards my principle each month... I should have the mortgage paid off in about 7 years and saving about $100K in interest...

My question is what is the best avenue to take? Paying down the mortgage, leaving it in the 401K/Roth/ESPP, or investing elsewhere right now? Other than the mortgage... I have no other debt.

A friend of mine suggested paying of the house may not be in my best interest at this time... I'm looking for additional insights.

Thank you in advance for the help!

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Mysunsai t1_jecpemt wrote

Cash is paying more than 3.9% right now, there’s no reason at all to consider paying that loan down.

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edtb t1_ject2zn wrote

Stress levels. It's a huge mental burden removed when you pay it off. It gives financial freedom of some sorts. My plan was to pay off my house and quit my job and find something easier on my body. Paying off my mortgage allowed me to financially be able to take any position I wanted even if it was a pay cut. It was about 30k but it was less of a burden and my quality of life is substantially better. At 47 yo it gives him the financial freedom to do whatever he wants. He already has a mm plus in retirement. He couldn't retire early of he wanted without the worry of a house payment.

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InteriorAttack t1_jecvhma wrote

> It's a huge mental burden removed when you pay it off

To someone. IDGAF about my 3% mortgage. I'll happily pay that forever.

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cashc0ww t1_jed7lc1 wrote

OP just as a hypothetical: you could buy a 30Y Treasury yielding 3.746% today and you'd make almost as much interest than what you'd be charged on your mortgage (3.9%).

In other words, you have a pretty good rate considering current rates. From a strictly numbers standpoint there is no need to pay it off quickly

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cashc0ww t1_jed7yat wrote

Another thing to consider is the tax benefit you get by contributing to your 401k. Depending on your tax rate it could easily mean thousands of dollars if you're maxing it. You'd have to calculate it with your #s but it could be higher than what you could save by using that same $ to pay off your mortgage

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