Re: Pay off Mortgage or Max TSP?
Scout was 100% correct...
But, you were already on that target - so the question is whether to invest in a guaranteed 3.5% fixed interest product or a variable product that normally gains about 10%...
However, because of the tax advantages of the mortgage, that guaranteed 3.5% 'bond' is really worth about 2.5% or so. The 'C Fund', however, will normally provide between -6% and +26% centering on 10%. I think the answer presents itself. Your investment in the 'C Fund' compounds on itself, the mortgage does not. The 'C Fund' is tax advantaged, paying down a mortgage is a tax negative till you no longer get the write-off (which is were I am). And, you seem to be starting a bit late in your TSP so you want to plow as much as you can early on so those assets can compound. Finally, a nice market dump would be just grand for you - just plow contributions into the C/S/I at cheaper prices.
It is rarely a great idea to buy down a mortgage early. They get cheaper as inflation increases pay. The only reason I can think of buying one down at the expense of growing and dynamic investments is to beat the affects of deflation. Deflation is a misery for holders of debt. But, if you are a long way from buying it out you will still have the same payment if/when deflation rears its ugly head...
Lookin' up at the 'G Fund'!!!
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