Mortgage Fever

I’ve got mortgage fever-close to paying it off…

I wondered: what if I stopped contributing to my 401k for just a year, could I pay it off?

My heart, being akin to Liesl in The Sound of Music, was certain:

The Sound of Music. 20th Century Fox

Then the math nerd stepped in and said “eine minuten, bitte”…

drawception.com

For the ease of math, let’s assume I contribute the max the govt allows:
$17,500/year

and that my company matches 6% of that…

Total to put into the market:$18,500
Estimated average return-12%

17,500 max
17500*1.06=$18,550 to start

12% return each year…
Year1: $20,720
Year2: $41,756
Year 3: $65, 317
Year 4: $91, 705
you see how this is growing…

http://m.investor.gov/tools/calculators/compound-interest-calculator

after this 4 years. let’s say it grows for 10 years without me putting in any more $…

Year 10:$319,000
Future buying power $217,223
( inflation eats away at it, sadly)

http://www.buyupside.com/calculators/inflationjan08.htm

Not skipping year 1: $$217,223

If I had skipped just year 1:
Future buying power: $155,308

Wholly cow!
I’m pretty sure an extra $100,000 would come in handy in the future…

Let’s say I owe $50,000 on the mortgage…
If I took out the $17,500 I would be taxed.
Let’s assume 35% tax because eminent socialism…

That leaves me with $11,375.

Doesn’t exactly “move the needle” ( as Dave Ramsey would say) on the $50,000 mortgage.

So, Liesl, my dear,
“waiiit a yerear or two…”

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