I'm 50 years old, married, I have a mortgage 30 years at 3.75%, I'm 4 years in, therefore 26 more to go
We are planning to stay in this house for the next 15 years (2034/2035), and we would like to rent it after that time.
I'm currently redoing all my portfolio I have around 70k to invest (I thinking about 70% stock, 10% REITs, 10% CEF and 10% bonds), I understand that at 50 I should be more on the 60 or 50% stock allocation, but I'm late on my saving, so I'm trying to catch up, I'm also pushing 25000/year on my 401k).
Our mortgage payment is about $1350 every 2 weeks.
- Without extra payment, we will be done by March 2045 (Principal + Interest = $906000)
- with a 10k/year extra payment, we will done by January 2036 (Principal + Interest = $798000)
What would I do ? invest 10% in bonds or make some extra payment to my mortgage ?
Update: consolidating all my post
Here is more details:
Brokage account 1: $54K ( HD / SO / SMH / IBM / PANW / UNP / BABA)
Brokage account 2: $58K ( all cash )
Company Stock plan: $96K (include RSU / ESPP / no more stock option)
Rollover IRA : $100K all cash - this is the one we are talking about
401k: $166K (VTIVX - Vanguard Target Retirement 2045 Fund)
Total: $474K - not much but
Bought the house: $700K - current market value 1.1M - $525K mortage, still $494K to go ! - biweekly payment $1350
First thank you all for you replies, here a more details.
I currently 100% cash in my IRA account, and have around 70K to invest.
I have other brokage account, 401k, etc ... with around 400k saved, and a house current value about $1.1M
My target allocation for this IRA account is so far (waiting for your comment): 70% in stock , 10% BONDS, 10% REITS, 10% CEF
I'm not sure that having 70% in stock in IRA account make sense, and I may change my allocation for the IRA to 33% BONDS, 33% REITs, 33% CEF.
I have more money to invest in a regular brokage account, and use that money for stock only, therefore my high dividend stuff, would end up only in the IRA account, and regular stock in a brokage account
So my question for you is: Is it better to invest my BOND allocation (current idea 10% of 70K) in BONDS or just make extra payment with that money towards my mortgage every year (about $7000) . Of course the money I will use to make the extra payment will not come out of the IRA, but from another account.
So to summarize:
Option1: IRA account: 70% in stock , 10% BONDS, 10% REITS, 10% CEF
Option2: IRA account: 33% BONDS, 33% REITS, 33% CEF
Option3: IRA account: 70% in stock , 10% BONDS, 10% REITS, and make extra payment to mortgage
Option4: IRA account: 33% BONDS, 33% REITS, and make extra payment to mortgage
Thank you all in advance for your comments
Thanks for your help.