Q.I took a $199,000 loan out in December 2007. I've doubled my payments and now owe $188,000, with seven years to go. Should I continue doubling every payment or invest the $1,556.28 a month in something else?

A.Here's a simple formula to help you decide whether it's smarter to send extra money to your lender or save it for retirement.

Multiply your mortgage rate by 1 minus your income tax rate. Compare that return to what you think you would earn on the savings or investment from which you are withdrawing the money. Choose the higher one.

Example: If your mortgage interest rate is 6.5% and your tax rate is 25%, the math is 6.5 times the difference of 1 minus 0.25 (or 6.5 times 0.75). The result is 4.875%. That's your real mortgage rate when you consider the mortgage tax deduction. So that's the rate you'd want to beat when making other investments.

It's hard to argue against paying your mortgage off early. You can save a ton of money in interest. We ran some numbers assuming that you have a 30-year fixed at 6.5%. Those extra payments are going to save you just over $200,000 in interest. With the standard monthly payment you'd pay $253,831 in interest over 30 years, but with your accelerated payments, you'd pay just $52,588 in interest over 7.5 years.

But in reality, you are only making 4.875% on that money.

We assume that you're not taking this money out of a tax-protected account. We'd advise against that.

If you moved $5,000 of your savings into a Roth IRA each year, your earnings would likely be higher and they would grow tax-free until you're forced to take withdrawals when you reach 70 1/2 -- although you always have access to your money. This is probably the best way to grow your retirement nest egg.

For more advice on saving for retirement, take a look at our 6 simple rules for a successful IRA . And be sure that you are contributing the maximum amount to your 401(k), if you have one. We have 7 simple rules for a successful 401(k) account to guide you.

If you're taking care of those investments, it's time to look at your options. Right now savers are hard-pressed to make money due to the recent rate cuts by the Federal Reserve. But that will change. Last summer a lot of certificates of deposit were paying well over 5%. When that time comes again -- and it will -- a CD paying 5.75% would beat the 4.875% you're making with extra payments. You would get an even better return "laddering" some high-paying CDs. To see how this can benefit you, check out our CD ladder calculator.

You could also buy mutual funds with a portion of your money. In the long-term you should be able to make 8% or better on your investment.

For some people is it important (emotionally) to have their house paid for, and it would be great not to have to write out that mortgage check every month. But if your main goal is to maximize growth on your savings, it is likely that paying off your mortgage early might not accomplish that.

Whether you're buying a home or refinancing an existing mortgage, we have a mortgage calculator that can help you make the right decisions.