Quote:
Originally Posted by MomofFour
No, neither one of us is retired. My husband works full time and I work very part time, but will be able to work more in a few years when all the kids are in school! We do not have any early retirement plans at this point.
I know it looks like from our choices that we are very conservative, and I guess in some ways we are. We do really like the idea of being completely debt free and having our mortgage paid off. I also like the fact that if the mortgage is paid off, we could live off our earned income (with the exception of major purchases). However, I would say for the majority of our money we would like to move it to more growth oriented choices. I would also like to find more tax efficient funds, although taxes hasn't been too much of a problem for us the past couple of years. 
One thing to note, a large part of our money in the money market account came from a recent sale of some investment property.
Thanks again for your responses, you've given me a lot to think about.
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It is OK to be conservative, you just needed to say that. Growth oriented and conservative are not usually mentioned together in same paragraph though. And it's tough to measure the price of a paid off house.
Here is what I would do:
1) pay off the house now. It appears this will give you peace of mind. It is not what I would do, but it appears this is what you want to do and it's OK- most people with paid off houses do not regret it.
2) define an asset allocation (% stocks-%bonds) based on what you know now. I am guessing somewhere between 80-20 and 50-50 is where you will end up. Web sites like T Rowe Price or Fidelity will help you with this. Do their retirement calculators and risk assessments.
3) pick asset classes to make up the asset allocation- large cap stocks, mid cap stocks, small cap stocks, growth stocks, value stocks, foreign stocks, REITs, commodities, bonds etc...
4) analyze current holdings and decide if any of them fit the asset allocation and asset classes in 2) and 3)
The asset allocation should have 3 pieces which are managed seperately
1) Emergency fund with between 3-6 months expenses in cash
2) Intermediate expenses (things like new roof for house or new car) could be cash or something more moderate. This allocation should be geared towards stability (cash) or similar (a 20-80 or 40-60 balanced fund works too)
3) retirement savings (this should be the 60-40 or 80-20 allocation you decide above).
Some people combine 1 and 2, some combine 2 and 3. Few people consider the EF part of their allocation as best I can tell (I do
not consider it part of mine).