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[quote=Anonymous][quote]If your dream scenario is to have the house paid off in 12 years when the first gets to college, and your current payment schedule has it paid off in 11 years, you're on the right track. You might not get great returns from investments this year, but if your strategy is long-term then this is the time to get in. The market is on sale. Buy it now. For the allocation between 529s and taxable accounts, I'd fund the 529s up to the point you feel like you've got it covered for each kid. My earlier post assumed you're already contributing there, since you've got $85K, but if that money is coming out of the $4K/month then I'd do maybe a thousand for each kid and invest the rest. [b]That way you get tax advantages but all of your savings isn't tied up in dedicated accounts. [/b]

Long story short: this is a great conundrum to have! You guys are so on track in so many areas that there's not really a "wrong" choice to make (although I'd strongly advise against prepaying an historically-low mortgage because the market is shaky). [/quote]

+1.  OP has got real First World problems!

I second the motion on not over-saving in 529s.  Those funds will be taxed heavily if not used for approved college expenses.  If Larla gets a scholarship, mom and dad will get burned.  Similarly, if they're saving for Larla's medical school and Larla decides at 23 she wants to be an astronaut, the Tax Man will be thrilled for her.     [/quote]

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