Reply to Is it completely stupid to pay off our mortgage?

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[quote=Anonymous]First of all, when you say you "max out" 529s, do you mean you contribute enough to get the max tax deduction (maybe $2-4k a year depending on where you live), or enough to get the max gift tax exclusions (around $14k now)?  If it's the former, you might want to put some more money into 529s (and then you probably can take any excess state tax deductions in future years as a "roll forward").

Second, if the choice is between paying down your mortgage and leaving the money in a low interest savings account then the question is really comparing the returns on those two (which is probably 3% vs. 0.1%) and the liquidity, meaning your ability to access it if you suddenly need a chunk of money (which is obviously much easier if it's in the bank).  You should at least keep a chunk of the money accessible as an emergency fund to provide some liquidity, but paying down the mortgage is not a bad financial move with the other money.

There is another question about whether it makes sense to do some more investing in the market-- perhaps start with $1-2k a month in a broad based index fund (or a balanced fund, with both stocks and bonds)-- but that depends on you being comfortable investing in stocks.[/quote]

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