[retire@40]

You didn't mention at what age you wanted to ER, but frankly, unless you hit the lottery, ER is not going to happen soon for you.

You will either need to get a second job, quit your current job and find a much higher paying job, leverage with real estate, or start your own business. The key is to be creative and take some risk. Essentially, you need to take more risk or just plain work harder or both to make ER happen.

It's great that you have $8K in a Roth IRA with the income you have because I know people that make double you income with no retirement savings. So keep saving as much as you can and paying down your mortgage as fast as you can without causing hardship to your family. It's OK to sacrafice, but not to exagerate.

Plus don't forget that having 2 great kids is much more important than ERing, and believe me, I'm a fanatic about ERing. In a sense, you are already a multimillionaire by having 2 children. So, don't get too concerned with taking invaluable time away from your kids just to earn an extra buck for ER. It is much easier to ER without kids, but being a parent myself, I would work till I died (shivers) if it were a choice between working and raising a great child.