There are a number of mutual funds that are designed to be tax efficient. Likewise some ETF's have low dividends and rarely buy or sell stocks so they are naturally pretty tax efficient. Buying one of these and holding it for decades can work out well. The capital gains tax rate on these could be lower than the tax rate you would pay on the non-deductable retirement account. Under the current tax laws if these go to your estate they will go at a stepped up cost basis and the capital gains tax may never be paid. For most people having a paid off house when they retire is good plan so you might want to consider the question of paying off the mortgage more of a question of "when" instead of "if". The last I saw about a third of all houses are owned without a mortgage. I didn't see any mention of college savings plans, if you are eligible for one that would be worth looking into for the tax advantages. You didn't mention your spouse's retirement savings. Even if your spouse does not have any income you can still usually fund their retirement accounts if you are eligible. Greg
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