I agree with everyone so far - ramp up your savings, lower your spending, and do extra payments on the mortgage debt. Please don't take money out of your IRA to pay your mortgage off. At your tax rate, that's really robbing Peter to pay Paul. You have a good start on your investment account. Think of it as you've got half and your spouse has half. You mention your pension, what does your spouse have? We don't need to know, you just need to think about this. Half a million $$ on a 4% draw-down - which is generous, most advisors nowadays advise 3% - is $20K per spouse, before taxes. With tax hikes almost certain to come in the future, what are you estimating as your future tax rate? Have you looked into Roth conversions? Instead of throwing all your bonuses and extra funds into the mortgage, you might get a better return by splitting the money and using some of it to pay the taxes on the conversions each year before retirement. Also, your spouse needs to roll over those 401k's into one IRA. Trust me, if anything happens to her, it's a paperwork headache for the survivor to get that done. It takes time and energy, and when somebody's grieving, it's the last thing one wants to do. But it's a necessity if you don't want the IRS to get involved. I'm going to offer some questions for you to think about because you are at the perfect point to start doing serious retirement planning. The reason you need to figure out if your assumptions are correct for future savings and the best return on spending, is that if those assumptions are wrong or plain bad luck intervenes, you still have time to adjust and make corrections. Have you and your wife sat down to talk specifically about what both of you envision retirement to be? What's your 'bucket list'? What's hers? What do you want to do in retirement? How much will it cost to do those things? For example: I retired 2 yrs before DH did. Our expenses did NOT go down and our income stayed static because we were contributing as much as we could to DH's 401k. But when he did retire, our expenses jumped overall. We have retirement health benefits, so there was no extra cost there. But we wanted to travel locally, and even that required several hundred $$ of clothing and travel accessories. We were able to donate an entire carload of work clothes to charity, which was great for deserving poor folks, but no one was going to pay us for them. That first year we spent almost four months out of twelve traveling through Northern CA and the PNW, mostly car trips but a few airline trips, at a cost of almost $25K post-tax. We do what I consider to be mid-level travel: not budget or RV travel, but not luxury high-end places either. If I were in your situation I would find a certified or registered financial advisor to run some numbers. What will happen if one of you dies? What happens if one of you gets disabled and needs care? What happens to the surviving spouse if death or disability happens BEFORE retirement? Are you adequately insured to mitigate the bigger risks in your life (and it takes some analysis to figure out what those risks are, that might prevent you from achieving your goals)? Do you have enough $$ coming in for a sufficient 'cushion', especially if you intend to maintain two houses in retirement? Do you know what medical insurance will cost for a pre-Medicare senior? What if a serious medical condition happens and one spouse becomes uninsurable, or at least rateable? Can the budget afford the insurance and any needed medications or extra co-pays? How do you plan to handle long term care costs for one of you? For both of you? These kinds of questions are just as important, perhaps even more so, than the simple question of "should I pay off my mortgage with IRA money." HTH, and good luck going forward.

Establish a Traditional IRA account. I believe you can both establish separate IRA accounts, allowing you as a couple to put aside $4K each (if under age 50) or $5K if 50 or over, annually. Any additional amounts you can save should be in separate taxable investment accounts. Any savings are better than none, obviously; so don't let the after-tax issue deter you. Any brokerage can set up automatic monthly deductions from your checking or savings accounts that allow an easy way to contribute without hassle. You'll want the lowest cost brokerage and funds, which means Fidelity, Vanguard, etc. Make sure you can allocate your contributions into at least 2-3 different funds to give you a balanced portfolio. Or, pick a low-cost target date fund, although I don't personally like them. It's difficult to evaluate past performance on them, and many trail the market averages. Good luck to you going forward!

The 2 things you can control in investing are the cost of investing and your asset allocation. One approach to keeping the cost to a minimum is to go to a fee only financial planner, who will charge by the hour. they usually will give you a free first hour so you can see if they are right for you. Then you can negotiate a fee for an overall "plan." You should ask them to explain what exactly that will look like, so you know what you're paying for. That plan should specify how your money is going to be invested -- how much in stocks, how much in bonds, and how much in money market instruments -- and how you plan to allocate additional contributions into your retirement accounts. If you google CERTIFIED FINANCIAL PLANNER, you will find one or more websites of professional organizations of fee only financial planners who are certified as having successfully completed instruction and passed rigorous tests to demonstrate their competence. I would strongly urge you to read up on and give serious consideration to index mutual funds. They have the cheapest expense ratios, and you don't have to worry about picking a fund that has a "good" stock picking team, because the investments are targeted to match broad indexes of the stock and bond markets. So you just have to figure out what your asset allocation should be -- how much risk you want to take -- and you should plan to be more conservative as you get closer to retirement. If an advisor is telling you they can "beat the market" stay away from them as fast as you can, because that claim is false. No one can consistently beat the market indexes. After you have a reasonable understanding and level of confidence that your financial plan is right, you will just need your financial planner for an annual check up to see if you are on track toward reaching your goal. Needless to say, there have been many check up sessions in the past year or two because of the market turmoil. In any event, once your plan is in place, your annual expense should be just a couple of hundred dollars or less. One more thing: Once your retirement nestegg reaches a certain threshold, say, $500K or more, some large mutual fund companies will provide financial planning services free of charge. Vanguard does that, and I think Fidelity and T Rowe Price do also. I think their planning services are available for a modest fee if your total amount invested is less than the threshold. Paying a certain percentage of your total amount invested is not necessary, unless you need time for the first year, say, to educate yourself on what investment approach is best for you. But make sure you read the fine print of the papers you signed, so you avoid a costly mistake. If you signed a contract that forces you to forfeit a bundle if you withdraw, you should contact a lawyer or the Security & Exchange Commission to find out if such terms are legally enforceable. I think they are not.

Greetings cactus catie, The problem that many folks who invest have is that when the value goes down a little, they don't get too worried ... ... but when it's gone down quite a lot - they get scared ... and sell. Some investors set rules for themselves - when a fairly non-volatile stock goes down 10% - they sell. Once it's gone down quite a lot, if it's a quality stock, sometimes/frequently it may be a time to buy more, rather than selling. As one mutual fund manager used to tell us mutual fund sales guys/gals, some years ago - he liked to get a Dollar for 60 cents ... that is, a stock where the value he assessed, after some investigation, to be worth a dollar, that he could buy after a market drop for about 60 cents. A stock that I bought 45 years ago for $4.15 - 20 (paying about 10 - 12 cents annual dividend) had gone up, down and sideways for many years, and the dividend had usually been between 3 - 4%. In about June of '07, I could have sold it, paying annual dividend of $3.08, for $107.00 or so ... and in the summer of '07 they increased the dividend to $3.48. That bank was substantially involved in the meltsdown of the U.S. financial fiasco, and the share price dropped to about $40.00. I shoulod have been watching it closer and have sold it after a slight drop, but didn't. Didn't buy more at about $40.00, either ... and it has since recovered to about $75.00 or so ($76.84 at today's close). I've been considering buying another Canadian bank ... but haven't, yet. I'm not too enthused about mutual funds - as many of them, despite their claims of their managers' superior skill at investing, don't produce any better results than the segment of the investment systemm in which they operate. Part of the reason is that they buy and sell quite a lot, with fees payable each time ... and they charge a management fee of usually 1.5% per year, sometimes more, as long as they manage their clients' money - and in Canada, most of them charge about 2.5% (or more) a year. While I paid a commission to buy that stock, 45 years ago, I haven't paid anyone a cent to manage it, since. Big difference! Having lived in 22 places in my 80+ years, and for a number of those years having lived in accomodation provided by my employer, I've never owned a home. While I may be over 80, I feel comfortable having something like 80%, sometimes more, of my assets in common stocks of (mostly) quality companies. Part of the reason being that I feel that I should finance my retirement to age 100 ... in that they tell me that most folks would rather run out of days before they run out of money ... rather than theother way around. When I was 70, I thought that to be six blocks of five years each. And, as most of us need a larger fund for probable health care and possible retirement or nursing home accomodation, I'd probably have a greater need for money later in that period ... and inflation means thatthe pricedes of things go up, which owuld mean a larger need for money, later. So _ I'd better stretch the eating of that first five-year block to 10 years ... which would mean 5/6 (83% or so) of my assets intact after 10 years. As many advisors suggest that many well-chosen, quality stocks tend to develop growth, despite interim fluctuations, over 10-year or longer periods, I like the prospect of possible growth in the number of my invested dollars ... and when I pay tax at regular rate on only half of that growth ... andnot until I sell - I like that scenario. Much of the increase comes in theform of dividends, to keep me afloat in the meantime ... and in a number of situations, I pay a low tax rate on them, but interest income is taxed at top marginal rate. That should be enough for now - and the library closes in (now, under ) five minutes. Good wishes for increasngly skilled investing. ole joyfuelled (with a bit of help from a dollar or two,, here and there)