Quote:
Originally Posted by afchic
For the smarter financial folks than me, here is a question.
My husband and I have a home appraised at approx $300K, with a $208K mortgage. If I were to increase our mortgage payments by a hefty amount, and the only thing I would have to do is stop paying into my TSP, leaving my IRA and Mutual Funds as they are, I could pay off our mortgage by the time I retire in 4 years.
Is it better to pay off the mortgage (5.25% loan) or is it better to take that extra money and dump it into my TSP, as well as increase the amount going into my mutual fund.
The home is our only debt. No car payments, no credit card payments, and kids college is already accounted for in our GI Bill.
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Keep it as simple and focused as possible with the least amount of risk. This plan is based on what I'm currently doing and is from Dave Ramsey. Too many people want to offer advice, but admit they aren't financial geniuses!
Emergency Fund: If you don't already have it, get 3-6 months of basic living expenses in an emergency fund before you do anything. If your already there great!
Retirement Investing - Continue to invest where you get a match first (i.e. TSP 5%), but no more than 15% of your wages. Make sure your TSP is where it should be; i.e. 60% in C-Fund, 20% in S-Fund, and 20% in I-fund. This breakdown is straight from an article that Dave Ramsey did and shows long-term that it's the right percentages/funds.
Paying off the mortgage - Dump anything and everything else you can into the mortgage to pay it off ASAP. Stay focused on the goal; retiring in 4-5 years and having your retirement home completely paid for will be sweet!
No chances and easy to follow plan!