Pay down Mortgage or Increase Taxable Account?

[akrono]

There are various schools of thought on this question. I stepped up my mortgage payments with the goal of having a paid off residence before I retired. I also continued to contribute to my IRA & 457 plan. I can tell you there is no better feeling than the peace of mind that comes with of having a paid for home...you will sleep very soundly. I doubt you will find many folks who paid off their home and regret it.
I know there are those who take a dim view of Dave Ramsey. I dont worship him but I think much of his advice is sound. When asked this same question his reply is " if you had a payed off house would you take out a loan against it to invest that money?" Nearly everyone responds NO! Well...that is what you are doing when you put your cash into investments but still maintain a mortgage. Food for thought..

 

[Regulator]

I’ve spent a lot of time debating myself on either paying down the mortgage or investing in taxable accounts with any leftover money (after having an emergency fund, saving for retirement, and 529’s). There are solid arguments on both sides and they are not always mathematical. I’m so torn on the issue, that I split excess funds 50/50 between the mortgage and Vanguard ETFs. When I get to the point where my taxable investments are more than my mortgage, I’ll pay the mortgage off. There’s a financial cushion beyond the emergency fund in the meantime.

Your situation is certainly different, and you’ll want to do what you feel comfortable with.

 

[rayvt]

I can tell you there is no better feeling than the peace of mind that comes with of having a paid for home...you will sleep very soundly. I doubt you will find many folks who paid off their home and regret it.

You can sleep very soundly having a retirement portfolio much much larger than your mortgage balance, knowing that you could pay it off any time by just making one call to your broker.

Uh, my neighbor regretted paying off their house down here when their house in Chicago finally sold. Instead of having $150,000 in the bank or invested, they have a paid off house---and had to go back to work part-time to pay their other bills. If they had invested in conservatively it would be $300,000 by now. Minus about $1200/mo for the mortgage payment.