Dear Liz: You say that retirement saving should always come first. What if I have no debt except a mortgage and am paying into retirement and college savings plans, but also choosing to accelerate my mortgage payments? I’m 40 and will pay off my mortgage in two years. I could probably do better by putting the extra principal payments into retirement funds, but psychologically it feels great to pay off the mortgage. I plan to accelerate my retirement saving after paying off the mortgage. What do you think?
Answer: There’s nothing wrong with paying down a mortgage as long as you’re saving enough for retirement and your other important financial goals.
The problem comes when people skimp on their retirement savings, thinking they can make up for lost time later. They typically can’t, and the longer they delay adequate contributions to their retirement, the more hopelessly behind they fall.