I've seen many of these posts, but I think my situation is different enough to warrant a new post.
me 43, spouse 41, children 10,8
tax-deferred retirement accts: $430,000
taxable retirement savings: $190,000
emergency fund: $350,000
529 plans: $65,000
mortgage #1: $110,000 3.99% 7 years remaining (originally 10yr HEL)
mortgage #2: $384,000 3.375% 14 years remaining (originally 15yr mortgage)
home value ~$700,000
no other debt
Marginal tax rate 39.6%
state tax - none
As a small business owner, my income is somewhat variable, and I think I'd like to keep my e-fund at about $100,000. We do max out our tax deferred space, and plan on contributing ~$50,000/yr to our taxable accounts. I'm tempted to pay down mortgage #1 and investing $140,000 into my taxable savings vs ploughing $250,000 into my taxable accounts. My current asset allocation is 70/30 stocks/bonds. If I put all the extra cash in my taxable account I will have to purchase some muni-funds to keep that AA.
I'm tempted to pay off mortgage #1 but wanted the opinion of others smarter and more experienced than me before pulling the trigger.
Thanks in advance,