I am 69 years old and although I have no plans to retire in the the next few years, I do want to be prepared in case something happens to me that would necessitate it. I have a balance of $123,000 at 3.25% on my mortgage.with about six years left. I can accelerate paying it off with an additional $600 a month, or I can continue to pay a little more than the minimum and put the pre-tax $600 into my 403B plan. What do you suggest?
Terry Says: Interesting question, especially at your age. It’s strange how retirement may creep up on you. I know you’re not planning to retire from your job, but keep in mind that your job may retire from you!
Now, if you get a matching contribution to yoru 403(b), then this is easy — just make that contribution. Otherwise you’re building up tax-deferred income, and I don’t know how much you have in that category — or how it is invested. A 3.25% mortgage is a nice deal, no reason to rush. But then a lot depends on how long you’re planning to stay in your home. It’s nice to have your mortgage paid off when you retire, and I’m sure your goal is to pay it down before retiring. If you think that you can seriously keep working for another six years, I’d be inclined to maximize savings (maybe some after-tax liquidity?) and shoot for a combined retirement/mortgage burning ceremony!