Question for the Money Doctors
Question submitted on Jun 12, 2011.
QuestionI currently have approximately $210,000 in liquid savings (not including my retirement accounts) and owe $187,000 on my mortgage which still has 14 years left at a 4.2% interest rate. Should I just pay off the mortgage locking in a 4.2% rate of return?
I wish I knew more (your age, employment, etc). Going on what you have said I would put some of that into municipal tax free bonds...more interest than savings and no federal taxation. ...yet still liquid.
If you are working max out your 401K contributions and defer even more if you are 50+ you can do an extra 5,000...tax deduction and more for retirement.
I hesitate to suggest anything more in depth without knowing more about you and your situation (health, age, married?, kids, college, annual income, housing, etc.).
If you could provide more information I'd be glad to make more specific suggestions.
For additional information visit http://www.360financialliteracy.org/