First and foremost congrats on coming out of that alive and in one piece. You posted the incident here so I assume you want to hear teh constructive observations of your esteemed fellow shooters. So here it goes.
1. Keep your door locked! (But you already knew this and I am certain do this now.)
2. Dogs are good. Having a dog may have driven him off at best and at worst, with a good dog, had let you know something was really wrong sooner.
3. Don't investigate "bumps in the night" unless you are ready to deal with the worst case scenario, ie bring the gun with you. (I keep a
www.smartcarry.com next to the bed and just throw it on, even if I am only in my underwear. The gun is in my hand, as is a flashlight, but I at least have a place for my reload and to put my gun if I need to pick soemthing up that fell downstairs.)
4. In addition to the bed side pistol have a bed side cell phone/charger. If the home invader leaves a phone off the hook downstairs your land line call for help will not get out.
5. After encounterring a BG in your home, or if you are certain there is one, do not confront them unless you have to to protect a life. THis guy now knew you were there and awake, he could have easily been waiting for you to come down again. Make the call for help and wait for the cavalry from a defensible postion. Stair wells are great for that, especially with a shotgun.
6. 21 feet & 2 seconds. A knife armed, or otherwise motivated opponent, can reach you on average in 2 seconds from 21 feet away. If you are in your home, with a gun pointed at an invader and they proceed to close on you the safest bet for you and your family is to shoot. I am willing to bet your living room encounter was more like 10 feet. If this nut had charged you perhaps you would have hit him, perhaps not. Perhaps the hit would have stopped him but there is a strong chance you were going to be fighting for control of the gun or to keep him from inflicting a knife wound. Your desire not to take a life was noble but in my opinion it was misplaced. You and your familys' lives come first. He refused to show his hands and advanced on you after being challenged. Fire until the threat is removed.
7. Assuming you are taken out and he either has his own gun or yours now, what is your wife supposed to do to stop him? Mine has a Remington 870 and is waiting at the top of the stairs for my "all clear honey." She knows if I say "All clear Debbie" to not let down her gaurd. Her name is not Debbie.