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Question for the Money Doctors

Question submitted on May 3, 2012.


Our children are grown, and this year we had to pay taxes. We file joint, and earn ~120K gross. We are both in our early 50''s. If I were to defer some income (12K), I would have less to contribute to the additional principal on our 30-year mortgage for 250K at 4% interest. Could you direct to a calculator that would help to project the savings on deferring some income (tax benefit, plus earnings) vs. paying the additional $1,000/month on mortgage for next 15 years....


In general terms if you are paying 4% on your mortgage over the next 30 years, it would be a win for you and your family if you can get a return of greater than 4% over the same time period.  But it is not that simple. 

Are you able to deduct your home mortgage interest or do you only take the standard deduction?  What is your tax rate now and what will it likely be in the future when you retire? 

What level of risk are you willing to take to get a return of greater than the 4% you are paying on your mortgage?

There are several calculators on our website that might be helpful.  Check them out at

 I hope this is helpful.

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