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Path: utzoo!watmath!clyde!floyd!harpo!decvax!cca!ima!haddock!johnl
From: johnl@haddock.UUCP
Newsgroups: net.invest
Subject: Re: Mortgage Pre-payment vs IRA - (nf)
Message-ID: <141@haddock.UUCP>
Date: Wed, 28-Mar-84 23:36:49 EST
Article-I.D.: haddock.141
Posted: Wed Mar 28 23:36:49 1984
Date-Received: Fri, 30-Mar-84 02:11:58 EST
Lines: 13

#R:ihuxm:-94000:haddock:11900006:000:592
haddock!johnl    Mar 28 15:39:00 1984

T. C. Wheeler is right.  Prepaying your 12.9% mortgage would be a poor idea.
At this point it's not hard to get an IRA vehicle that pays over 12%
(at Merrill Lynch, for example, who lay it off on some anonymous bank.)
If we assume that the interest rates are the same, which they would be nearly,
you get to keep all of the IRA interest (until you withdraw it in several
decades) while Uncle Sam makes up half of the interest you pay on the
mortgage.  Putting it in an IRA almost doubles your return, even before
you take the $2000 deduction for the IRA contribution.

John Levine, ima!johnl