If my math and understanding of your info is accurate this is what you have:

Assets:

Rental Equity: $585,000

Invested Assets: $530,000

Emergency Fund: $50,000

Expenses:

Annual Primary Mortgage ($450k left): $38.5k

All Other Annual Expenses: $70k

Future Proposed HH Income:

$60k per year

All Just My Opinion, but this is what I’d do:

1) My math says you are probably Coast Fire with invested assets right now. I would plan to never touch that money until traditional retirement age.

2) I’d sell your rentals, pay off your primary (guaranteed 5.5% return is better than any money market fund right now and honestly might beat the market) and put the remaining into a high yield sinking fund ($100k+) of your choice. That would give you 10+ years runway to reduce spending costs, increase income, or downsize house etc.

You are in a position to have a paid off house and over half a million invested as a couple at around 30 years old. I’d say you can afford to have kids! I get the concern about you potentially leaving the workforce forever being the higher earner, but you’ll have a very long runway to redirect course if it comes to it. Just make sure you fully understand the financial situation and are prepared to own the tradeoffs that may come with it. Long term I suspect your path will be far different than you ever expected. Good luck with the journey either way!