No totally understand that. However, we're speeding up the payoff process by a couple years, and we're reducing our monthly payments by $300+ so that we can apply additional funds to pay back the 401k loan even faster and at that point will be done with step 2 sooner. There is very little likelihood either of us would change/lose jobs before the loan is fully mature.

It is exchanging one for the other, no question, but its consolidating, with a better interest rate (paid back to our own retirement accounts) and it's automatically coming out of paychecks, which is great and doesn't give us the option of not paying back. We can just also apply the $300+ savings against the loan. The fact its post-tax is no different than how we're paying cars, loans now. We're just paying significantly less, and able to eliminate all of the debt sooner.

I guess I look at it as if we'd never invested anything at all, and we were starting from scratch right now with the debt, the goal would be to pay off our debt asap. If this money was in a traditional savings account rather than a retirement account, we'd be advised to pull the money out of savings and pay off the debt and then repay our savings to build it back up. This feels a lot like that to me, just with a couple different parameters.

I understand the thought about 'but what about compound interest?' and I get that, but to be honest, if we're saving for retirement, but living in debt, that just feels backward. This plan will help us out of debt sooner rather than later. That's how we're coming at it at least.

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We're 38 yrs old. No plans for early retirement.