Let's say one has a lot of disposable income per month and the age is
- The options are given below and the goal is to maximise lifestyle (i.e., spend money on things we don't need) with some respect for age (i.e., lead a good life now).
- Paying down a 30 year fixed mortgage (at a rate of 6%, say). This would be good but since it won't get to zero right away and the payments will be the same, this is essentially a deferral of the disposable income.
- Investing that extra cash in a retirement plan. This is another defferal since it will lead to excessive funds during retirement (which I never plan to).
- Investing that extra cash in a normal plan (where the principal can raise to adjust for inflation, but excess cash can be used to lead a better lifestyle).
I know it is very situation dependent. In writing this e-mail down, I figured out an option that is actually what I'll do: all three of them.
--Ram