What would you do - pay off student loan or pay down mortgage?

[ziggy29]

That is some good info. I noticed that
- Pay down deductible mortgage or student loans (rate 4% after tax)
is above:
- Invest in taxable account (rate 4% on municipal bonds)

Does anyone know if home mortgage interest is deductible on state taxes?

All situations are individual and may not take things into account like personal comfort levels and cash flow concerns.

Paying off a smaller loan rather than paying down a larger one, for example, will significantly boost cash flow, so if cash flow is a concern paying off a smaller one (like the Dave Ramsey "snowball" method) would be preferable.

If cash flow isn't a concern, paying off the higher rate (after-tax) debt would make more sense. And if your debt load is manageable and FIXED RATE, and you're comfortable with the debt, it may be better long-term to invest the money instead of paying off debt. Again, if you're as averse to debt as I am, you'd likely prefer a sure-thing lower expected return debt paydown than investing.

And all this assumes you have a more than adequate emergency fund already in place. In this economy I'd save the money for liquidity unless I already had a humongous emergency fund or had good reason to believe that my current income stream (whether from a job, a pension, SS, personal savings) was extremely secure.

As for the deductibility of mortgage interest on state taxes, that would depend on state law but I believe it is deductible in most states.

 

[bank5]

Paying off a smaller loan rather than paying down a larger one, for example, will significantly boost cash flow, so if cash flow is a concern paying off a smaller one (like the Dave Ramsey "snowball" method) would be preferable.

Boosting my cash flow and the psychological reasons are why I'll probably pay off the student loan first. I have 12+ month E-fund and 1 1/2 secure jobs so I'm in pretty good shape as far as that goes. I'll probably wait until tax time to make any moves though to see where I stand after paying Uncle Sam.

I don't know that much about taxable accounts so I'm going to look into that too.

As for the deductibility of mortgage interest on state taxes, that would depend on state law but I believe it is deductible in most states.

I live in NC and find state taxes more confusing than federal. The tax form is this - http://www.dornc.com/downloads/D400.pdf
based on line 49 I think mortgage interest would be included.
[QOUTE=NC-d400]
Other deductions from federal taxable income (Attach explanation or schedule. Do not include any deduction for retirement benefits on this line.)
[/QOUTE]

 

[target2019]

Is your Roth fully funded for 2009?