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I'll just outline the rough debt totals, so you can get an idea of the big picture. My wife and I are fairly good with money, but I've got a second child coming very shortly, and I want to get the financial house in as good of shape as I can before it comes. I'm mostly just questioning the idea of paying off loans where the interest is deductible. We currently owe:
*12k on my car (325/mo at 2.9%) *20k on her car (350/mo at 1.74%) *124k on mortgage (1092/mo at 3.5%, PMI of 67.50 drops off at 120k) *5k on medical bills (pay from HSA, no interest) We use our CC for all of our expenses during the month and pay the balance in full every month. Things like insurance I pay in full when due, and the gas/electric bill varies, but averages 200/mo. I recently paid off 5k of her other stafford loan that was higher interest, and that freed up 275 a month that we were paying. I've got around 11k in the mutual funds and stocks that I could liquidate in a day if I needed to, and about 7k in my regular savings account. Our monthly net income is around 5,500 to 6k (this will drop to around 4k for a few months after the baby and we'll have to dip into some savings I'm sure). We also have a rental property business that doesn't factor into this question, but about 10k of the savings we have is "untouchable" as we plan to use it for part of another duplex down payment. I feel that I don't currently contribute enough to retirement. I put 10% into my 401k and throw money in to a Roth IRA once in a while, but I don't max it out. Would it be smartest to pay down the mortgage to get the PMI to drop off, or to max out the IRA right away? I know PMI is tax deductible. The only interest we can't write off are the car notes, but the interest rates are so low that it'd seem trivial to get a higher return in an IRA. Would maxing out the IRAs be my best option? I just hate paying PMI, and freeing up another 67.50 a month sounds enticing. Leon Einstein fucked around with this message at 17:42 on Dec 7, 2016 |
# ¿ Dec 7, 2016 17:40 |
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# ¿ May 18, 2024 03:07 |
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I can max out the IRA for 2016, yes. I already put a few thousand in. We only have one IRA though. Should I start another one?
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# ¿ Dec 7, 2016 20:44 |