Markola
Thinks s/he gets paid by the post
In four years DW and I both see the stars aligning in our respective careers so that we can start the downslope from our stressful management roles - and peak earning years, probably - to something more enjoyable or part time. At that time, I'll be nearly 55 and she'll be 57.5. Being rid of our 4.1%, $290,000 mortgage with 28 years would give us more options to choose from four years from now because our required yearly spend would drop by $18,000.
For years, we've maxed our pretax savings and are into the seven figures. We have no debt except the mortgage and the house is worth $425,000. We've done less well with after tax savings, which total $77,000. Without going into all of the obvious psychological reasons for having no debt, I think we have this four year wind if we want to knock out the mortgage so I want to make a decision. To do that, the math says we could ratchet back pretax savings to our 6% match levels and throw the rest at the mortgage for three years, at which time we could have a year left to either go back to maxing pretax or recouping some post tax savings. Hence my dilemma:
If we pay off the mortgage in 3-4 years, it looks like we will have to wipe out our after tax savings.
I'm not worried about not having enough net worth. The math actually doesn't point to much of an aggregate loss over time with our high, 63% or so savings rate. However, I like the comfort of having at least a year or so taxable assets at my disposal for "whatever" and it would feel funny to ratchet back our pretax savings during our peak earning years.
How would you suggest I think about these trade offs?
Sent from my iPad using Early Retirement Forum
For years, we've maxed our pretax savings and are into the seven figures. We have no debt except the mortgage and the house is worth $425,000. We've done less well with after tax savings, which total $77,000. Without going into all of the obvious psychological reasons for having no debt, I think we have this four year wind if we want to knock out the mortgage so I want to make a decision. To do that, the math says we could ratchet back pretax savings to our 6% match levels and throw the rest at the mortgage for three years, at which time we could have a year left to either go back to maxing pretax or recouping some post tax savings. Hence my dilemma:
If we pay off the mortgage in 3-4 years, it looks like we will have to wipe out our after tax savings.
I'm not worried about not having enough net worth. The math actually doesn't point to much of an aggregate loss over time with our high, 63% or so savings rate. However, I like the comfort of having at least a year or so taxable assets at my disposal for "whatever" and it would feel funny to ratchet back our pretax savings during our peak earning years.
How would you suggest I think about these trade offs?
Sent from my iPad using Early Retirement Forum