Quote:
Originally Posted by glock35ipsc
I agree with Steve. In addition, I would add:
You should have an emergency fund with 3-6 months living expenses (if you don't already),
then max your 401(k)'s,
then fully fund Roth IRA's for you and your spouse,
then fund ESA's or 529's for your kids,
then concentrate on paying off the mortgage.
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I don't completely agree (though there isn't anything majorly wrong with that plan).
I would fund the 401k up to the level to get the full employer match.
Then I'd max the Roths.
Then I'd go back to the 401k until that is fully funded (if you have that much available to invest).
Whether or not you do college savings or prepay the mortgage is really a personal decision. Not all parents feel the need the save for college. Prepaying the mortgage is a perfectly reasonable way to go at that point once retirement is taken care of. If you do plan to help your children financially with college costs, having the mortgage paid off could be very helpful by freeing up cash flow that can go toward college costs. Personally, we will still have a mortgage when DD goes to college, but we've been saving in a 529.