All good ideas and I have thought about the mortgage. The reason that I am not pouring more money into it is the California housing situation. When I bought the house I paid $340k for it and put $70k down. If I sold it right now I could maybe get what I owe on it. I just can’t throw good money after bad. If I could get out of it without a loss right this minute, I would. I have thought of selling it just for what I owe, renting an apartment, and forget about the $70k. That’s a big hit to take and I’m not prepared to do that yet.

Another reason for my decision is that my sister has talked to my brother and I about getting a family home. They are 10 and 12 years older than me, respectively, and my brother and I are single. I think I would really like that. We will be getting older and it will be nice to have people around. My brother and I still work and if I can use some of my retirement nest egg to go in on a house with them and not have a mortgage payment, that would be fine with me. In the meantime I can be putting extra money into investments instead of into this house that I don’t want to be in long-term.

As for credit cards, it is just incidental amounts and I don’t usually carry a balance or pay interest. I bought the quilting machine on a credit card that I never used but they offered 6 months 0% interest so… I used it for the machine. I didn’t need to but why not use their money instead of mine? I then got a 5-figure bonus at work and decided to pay off almost all of it. The last $400 will surely be paid off before the 6 months is up in June but there is no hurry on my part.

I don’t pay much in taxes on investment gains as I do very little buying and selling. I have income generating funds like REITs in my ROTH and funds that are fairly tax-efficient in my taxable account including muni bond funds that are state and federal tax free. I’m happy with the choices in my 401k and have an overall portfolio allocation that suits me.

I have given a lot of thought to what is right for me and my situation but the house/mortage is a major sticking point. If I wanted to ruin my credit and be irresponsible, I would do what so many people are doing… walk away from a house that isn’t worth the amount owed on it.

Just two pieces of advice:

Pay off your cards. You have the money, there is no reason to throw away any money every month on that interest.

Come up with an accelerated mortgage payoff plan. Normally, I recommend people not invest more than whatever is matched in an employer’s 401k before they pay off their home. However, if you intend to retire at 55, I wouldn’t want you to neglect your retirement fund contributions, as you can only make them as long as you have taxable income. That being said, you have 9 years until your retirement goal, and you don’t want to face the prospect of retirement with your home still mortgaged, it’s just too risky.

It will take about $2,200/month in principal payments in order to pay off your mortgage by your retirement goal date. I would for sure use the money you a putting into a taxable brokerage account. Even with a “good” interest rate on your mortgage it is almost impossible to earn higher returns in the market while paying taxes on your gains.

You say that is only about $400/month. I would squeeze what you can from other sources, then take the difference (+/- $1,800/month) from your retirement contributions. Which one depends on your situation.

If you are making ANY non-deductible 401k contributions, I would use those next. If you are happy with the investment choices in your 401k, and your contributions are all tax deductible, you may wish to lower your ROTH contribution, and maintain the tax-deductible 401k contributions that could be helping you save.

However, you already contribute significantly more to your 401k than you can to a ROTH, so you may want to take the difference from the 401k, simply to maintain a diversity in types of retirement accounts.

Hope some of this helps, keep pressing toward your goal, it is never to late to start doing things right!

I just started seriously saving for retirement 5 years ago at age 41. I only had a couple of thousand dollars in my 401k even. I started by increasing my 401k contribution, and continue to increase it by at least my raise percentage each year. This year I will be at the max yearly contribution of $16,500. I opened a ROTH and have done max contribution each year. I put $340 per month into an employee stock purchase plan and whatever else I can into another brokerage account/mutual funds, try for $400 per month.

The only debt I have is my mortgage of $230k. My SUV is paid off and I only have incidental amounts on credit cards that is usually paid off each month. My standard monthly bills came up to a whole $515 this month.

I have $50k in 1 year CDs, one maturing each quarter, as the cash part of my investments. I am just about to hit $250k in retirement funds!

It’s been hard, very hard sometimes. I see people who have all these “things” that I’d love to have too. Sometimes I wonder why am I killing myself doing this? Then I think of my goal to retire at age 55 and I keep plodding along, one day at a time, one month at a time.

I recently spent $6k on a long arm quilting machine. I want to do this work, designing, making and selling quilts, when I “retire” so I bought the machine and hopefully will be good at that in 9 more years. I have 20 years experience making quilts but not machine quilting them so this is an investment in my future too.

Keep your eye on the goal and the relief and sense of accomplishment when you make it.

My husband and I lived in a $395 550 sq. ft. 1-bedroom apt right out of college that helped us save up our 20% down for our current home. We made less than $25,000 jointly that first year, but we managed to save $5,000. We saved another $15,000 the following year when our income went up to about $45,000 jointly and our rent went up to $450 a month.

I completely understand what you are going through and hope everything works out fantastically for you and your wife!

Good luck with your move, I am sure you will write about it here

Enjoy the new place, and congrats on the added savings!

For me and my wife it helps to have our goals prioritized. To decide whether or not to cut the cable off we could have a good discussion about how that $100/mo impacts our reaching our goals. Sometimes we opt for the luxury, but other times we’re intent to reach our high priority goals.

Keep it up Robert! Very inspiring.