Reply to Saving for college vs paying off house

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[quote=Anonymous]I'm a CPA and I am with your husband on this one. By paying off your mortgage, you are basically locking in a 3.5% - 4% guaranteed rate of return which isn't huge, but you can't get that anywhere else with 100% certainty. Secondly, most people overestimate the benefits of the mortgage interest deduction and itemizing in general - you already get a standard deduction without doing anything so the benefit is only the difference between the two. Thirdly, the vast majority of people in the U.S. do not have a college education. What will you do with the 529 if your kids don't go? Fourth, evaluate your savings rate and the pace at which your net worth is growing. We have similar incomes and increase our net worth about $100K each year so could easily pay off your mortgage in 3-5 years. If I were you, I would max out your 401K/Roth IRA, make sure you have an adequate emergency fund, and then allocate remaining funds to the mortgage. With the mortgage out of the way, you should be able to cash flow your kids education.[/quote]

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