Ask Terry Questions 401k or Pay Down Mortgage?

401k or Pay Down Mortgage?

By Terry Savage on September 29, 2013 | Housing / Real Estate

I have approximately $300,00 in 401k and I’m 58 years old. I owe $120,00 on mortgage, and contribute 25% of salary to 401k. My question is this. Would it be smart to only contribute 5% to 401k, and start paying off the principal with the other 20%? We live modestly, no big credit card debt, car payment, so on. I make approximately $60k a year. Thank You.

SAVAGE SAYS:You didn’t tell me the interest rate on your mortgage!  If it is above 5 percent, then you might want to pay down the mortgage.  It’s always a good feeling to have your home paid off when you are ready to retire.  But if you are getting an employer match on your 40l(k) contribution, be sure to contribute enough to get the full match!



a personal
finance question