Accelerated Strategies

    Pay off the mortgage, or invest the cash flow?

    Send the same monthly cash flow to extra principal, or to an investment account. After the mortgage is gone, that path invests the retired payment plus the cash flow. No distributions are taken while the accounts grow. At the desired retirement year, the calculator applies the 4% rule to the balance at that point.

    Mortgage

    $
    %
    years
    $

    Investment

    $
    %

    Retirement

    years

    Scheduled Payment (P&I)

    $1,798.65

    Pay the mortgage first

    12 years, 10 months

    until the mortgage is gone

    At 10 years

    Interest paid by retirement
    $123,016
    Mortgage balance
    $87,178
    Investment balance
    $221,964
    Potential annual income
    $8,879
    Potential monthly income
    $739.88
    Net cash flow impact
    $1,739.88

    $739.88 potential monthly income plus the $1,000.00 cash flow is a net cash flow of $1,739.88. The mortgage payment is already included in that cash flow.

    Invest the cash flow

    30 years

    until the mortgage is gone

    At 10 years

    Interest paid by retirement
    $166,895
    Mortgage balance
    $251,057
    Investment balance
    $406,130
    Potential annual income
    $16,245
    Potential monthly income
    $1,353.77
    Net cash flow impact
    $2,353.77

    $1,353.77 potential monthly income plus the $1,000.00 cash flow is a net cash flow of $2,353.77. The mortgage payment is already included in that cash flow.

    Investment balance

    Year by year

    Pay the mortgage first
    YearMortgage leftInvestmentPotential monthly income
    1$283,980$108,300$361.00
    2$266,973$117,289$390.96
    3$248,916$127,024$423.41
    4$229,746$137,567$458.56
    5$209,393$148,985$496.62
    6$187,785$161,350$537.83
    7$164,844$174,742$582.47
    8$140,489$189,246$630.82
    9$114,631$204,953$683.18
    10$87,178$221,964$739.88
    11$58,032$240,387$801.29
    12$27,088$260,339$867.80
    13$0$287,600$958.67
    14$0$346,546$1,155.15
    15$0$410,385$1,367.95
    16$0$479,522$1,598.41
    17$0$554,397$1,847.99
    18$0$635,487$2,118.29
    19$0$723,308$2,411.03
    20$0$818,417$2,728.06
    21$0$921,421$3,071.40
    22$0$1,032,973$3,443.24
    23$0$1,153,785$3,845.95
    24$0$1,284,624$4,282.08
    25$0$1,426,322$4,754.41
    26$0$1,579,781$5,265.94
    27$0$1,745,978$5,819.93
    28$0$1,925,968$6,419.89
    29$0$2,120,898$7,069.66
    30$0$2,332,007$7,773.36
    Invest the cash flow
    YearMortgage leftInvestmentPotential monthly income
    1$296,316$120,833$402.78
    2$292,405$143,395$477.98
    3$288,252$167,829$559.43
    4$283,844$194,292$647.64
    5$279,163$222,951$743.17
    6$274,194$253,989$846.63
    7$268,918$287,603$958.68
    8$263,317$324,007$1,080.02
    9$257,371$363,432$1,211.44
    10$251,057$406,130$1,353.77
    11$244,354$452,371$1,507.90
    12$237,238$502,451$1,674.84
    13$229,683$556,687$1,855.62
    14$221,662$615,424$2,051.41
    15$213,147$679,037$2,263.46
    16$204,106$747,930$2,493.10
    17$194,507$822,541$2,741.80
    18$184,316$903,344$3,011.15
    19$173,497$990,854$3,302.85
    20$162,011$1,085,627$3,618.76
    21$149,816$1,188,267$3,960.89
    22$136,869$1,299,425$4,331.42
    23$123,123$1,419,810$4,732.70
    24$108,530$1,550,187$5,167.29
    25$93,036$1,691,384$5,637.95
    26$76,587$1,844,301$6,147.67
    27$59,124$2,009,910$6,699.70
    28$40,583$2,189,265$7,297.55
    29$20,898$2,383,505$7,945.02
    30$0$2,593,868$8,646.23

    This is an educational illustration. It assumes a fixed rate and a constant monthly return. No distributions are taken while the accounts grow; the 4% rule is shown as potential income at the desired retirement year. It is not a forecast or a guarantee. Results vary. See our Financial Disclosure.