I just want to make sure I'm not missing something obvious:
I would like to pay off the mortgage before I stop working. The cash flow difference of not having a mortgage payment reduces risk more than having that extra money in the market when I actually stop working (but not a day prior). The reduced expenses should also make college financial aid & ACA subsidies easier to acquire. The common advice seems to be to take a lump sum out of a taxable brokerage and pay it off in one fell swoop.
However, our household income is not high enough that we are maxing out all tax-advantaged retirement accounts. We are currently filling ~$49,000 out of $77,600 available space. As such, we would have to reduce investing in a combination of 401(k)s & Roth IRAs by about $11k/yr to have enough in a taxable brokerage by the time we are FI to pay off the remaining mortgage at that time (12 years, $220k FV, 8% gains).
Alternatively, we could continue as we are, and once we are 2-3 years from FI, stop all retirement investing and put everything toward the mortgage. We would probably still invest enough to keep taxes reasonable, extending our timeline by a year or so, but that's it. Since my wife (currently) likes her job, she may continue working for a couple years anyway, which would allow for more maneuvering.
What are everyone's thoughts on these two options, and is there another option I'm missing?