esterling, you wrote:

I've been thinking of continuing my wife's and my annual $4,000 contributions to our Roth IRAs, but if we do that, we might not save for the $40,000. Would it be better to contribute to our Roth IRAs annually and then take money out in ten years (I'll be in my early 50s and my wife in her late 40s when the ten years are up) or simply stop contributing to our Roths and put the money that we would have contributed to the Roths in money markets until we reach $40,000 in ten years.

and also:

I believe we'll finish paying the mortgage in about 11 years because I have added $400 to our automatic monthly mortgage payments.

I'm not sure what interest rate you have, but by my calculations, at a 6% interest rate, if you add $400 to your payment on a $120,000 15 year mortgage, you will pay it off in a little over 9 years.

Might I suggest rather than robbing your Roth IRA contributions to pay your friend, that you put $275 of the extra $400 you have added to your mortgage payment into a high yield savings account? At 4%, over the course of 10 years, you will save up $40,628 (before taxes). You can then put the additional $125 against your mortgage for the 10 years, and after the 10 years, add the $275 to your mortgage payment. This will result in paying your mortgage off in about 12 years, which will be one additional year from what you had originally expected.

I think it is a bad idea to not contribute to your Roths or to remove money from your Roths to pay your friend, especially if you can fairly easily save up the money without a huge impact.

AJ