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Should we temporarily stop contributing to our 401(k) until we pay off our mortgage?

My wife and I have retirement funds of $1,200,000 in low-fee index funds. Our current annual family income is $171,000, which is my wife's salary. We contribute the maximum amount to her 401(k). Our primary mortgage is approximately $192,000. The mortgage principle and interest is $1,937 per month at 2.65 percent with 112 months remaining on a 15-year mortgage. My wife will continue working for 18 more years until retirement. I should be working again, too. Should we temporarily stop contributing to our 401(k) until we pay off the mortgage?

Career / Compensation, Debt, Retirement, 401(k), Mutual Funds, Real Estate
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September 2018

I would recommend continuing to contribute to the 401k for several reasons.

Not only do the contributions lower your current taxes, but also will grow tax free until you start taking distributions.  Over an 18 year time period this can be a very powerful savings tool towards your retirement. 

Next, your mortgage payment is very low relative to income and should not be a burden on you.  

Additionally, because the interest rate of 2.65% is so low, your investment return should outpace this over the next 15 years.  The more money you have working for you, the more money you will have when you retire. 

Lastly, since the mortgage is 15 years and the plan is to work 18 years, the mortgage will be paid off before retirement anyway and you can enjoy your retirement debt free.... or at least close to debt free.

September 2018