Q: We have extra money that we can invest or use to prepay our mortgages. Which is the smarter place to put our money for the next 15 years?
A: When I was an advisor this was my position: I believed an investor should max out their retirement accounts (IRA and 401k), including a non-working spouse’s IRA, before paying extra on a mortgage. With additional taxable money I tried to make the judgment whether the investor would likely panic during majormarket declines. If I thought they would sell during a market decline, I suggested they pay down the mortgage rather than lose the money. After making all the retirement plan investments, I, personally, would pay down a mortgage, even though I thought I could do better with the money in the market. Paying down the mortgage is guaranteed, while the market going up is not.