I have a very unmustachian house, which will certainly extend the time before I am financially independent. However, when one is married, one must compromise. With that said, I have the following dilemma.
I have a 30 year fixed mortgage at 4.375%. I can choose to put up to an extra $1,000/month towards the mortgage, starting in a few months, or I can add that to my 401(k), taking my monthly contribution from 15% (1,100/month) of gross household income to 27.5% (2,027/month).
In running the numbers, I can stay at minimum payments for the full term with the following results:
Payoff: June 2048
Total interest: $246,527
401(k) at June 2048: $3,548,244
If I put the extra towards the mortgage, I get the following:
Payoff: July 2032
Total interest paid: $105,554
401(k) at June 2048: $2,471,285
Essentially, while I double the time I spend paying on the mortgage, it results in a much larger nest egg. What is the price of the risk in this equation?