How best to adjust 401k vs mortgage
So, I'll start with a brief overview of my current situation. I'm almost 30, bought a home a couple years back, but below the 20% wonderful PMI avoiding threshold. Currently I'm paying an extra 25% on my monthly mortgage payment directly to the principal balance to help increase my equity above the 20% marker so that I can stop wasting extra money each month.
Currently I'm contributing 15% to my 401k which puts me about $4k away from maxing out my IRS limits of $18k. I figure to hit that mark it would take me roughly contributing another 4%.
Here's where I'd like some thoughts...so my loan interest rate against the home is 4%, it'll take me roughly another 2.5 years at the rate I'm going to remove the PMI, but am I doing myself more damage trying to remove that monthly nuisance when I should focus on bumping up my 401k instead? My 401k at the end of this year should be around 1x my current salary. I believe they say as a measure you should try to aim for 2x by the time you're 35? So, should I instead invest more into my 401k and not pay off my home as aggressively?
I also should have student loans paid in roughly a year which should free a bit of money considering I've been paying extra against them for quite a while now, so if both are significantly important, I should be able to adjust things in the near future to compensate any fall out of making an adjustment now as well.
Posted Aug 14, 2017, 7:35 PM UTC