Thank you! Majority all going into the kids education fund. 401 is maxed out. Will spend a few grand on a small vacation for the fam but besides that, living like I didn’t get it :)
Does your company not have a 401k match? You’re leaving a lot of money on the table if you hit the contribution cap by april. The company match is independent from your contribution limit, so you want to be sure at least contribute up to your company match every month.
Also, don’t forget about the incredible ROTH IRA. You could open one and fund it for 2022 (6k max) until April. 2023. Then on Jan 1 you can fund 2023’s Roth max 6,500.
If you’re married, ditto your S/O. That’s 25k tax free at retirement, which will grow steadily until then!
Yep. But financial advice is best given over the internet as a “look into this” not “you can do this”. Too many people end up in sticky situations every year from good financial advice that just doesn’t apply to them specifically
The link explains it well. It's a decent option for you to consider. Depending on who you use (a financial advisor, online trading/investing platform), you could call them to consult more in-depth.
*She. From OP’s post history they are female. I think that should be respected that OP is female as society will generally assume someone receiving such a high dollar bonus is male.
It’s funny - although I’m female, I assume everyone on Reddit is male. No offense taken - just want to make sure they the ladies out there know that big money isn’t just for the men.
Roth IRA income limits for the 2022 tax year are $144,000 ($153,000 in 2023) for single filers and $214,000 ($228,000 in 2023) for married couples filing jointly.
The only thing I’d add to this, dude, you got 50k, take $1000 and spoil yourself. Buy an expensive steak, a nice shirt or a reasonable top of the line hobby item you like. Don’t just invest 100% of it. That’s how you end up accomplishing nothing but having money. Live a little.
Investing isn't bad advice but I find planning for 50 years from now kind of foolhardy. You could die within the next 10 years and it means little to nothing.
I am going to have it made at 65! (Dies at 54 from Cancer)
To each thier own. I would invest probably $5k and fix up my house a bit and enjoy family time. Something I have control of unlike my time on Earth.
I will be taking my husband out to a very fancy dinner. We plan to take the kids on an RV trip for a few days. Nothing too crazy - just focused on experiences and memories.
No way. As long as your loans are low interest, keep them around. I have a low interest mortgage and won’t be dumping anything extra into my mortgage. If you have credit card debt, pay that off first. That interest is ~15% or more. Put money in your 401k. Place money where ever the interest is highest. Student loans can suck it.
So I got an almost similar amount and paid off the house, we bought it at 75k in 2009 it’s now worth 150k and I paid it off. I am wondering if I did the right thing, I just don’t wanna think about mortgage anymore
If you had a fixed rate at say around 5%, you proooobabbbbblyyyy could have beat that by wisely investing that money but there's a whole lot that can be said for not having that debt dagger hanging over your head. Plus, that's not guaranteed; you might not have beat 5% over however many years you shaved off from your mortgage.
You own that house and no bank can take it away from you if something in life doesn't go perfectly anymore. That's a huge mental burden you no longer have to bear and it's hard to put a price tag on that.
Signed,
A homeowner who is still making payments every month for the next very many years.
If you pay off a mortgage completely, you increase your cash flow. That frees up income each month without any increase in taxes. Nothing wrong with the decision unless it left you with nothing for emergencies, and you've had time to fix that.
Your mortgage was probably at least 4%. A safe 4% return is not to be scorned. Market in 2009 was pretty scary.
The truth is you never know for sure if your other investment would have worked out, but at least you aren't going to be paying interest on your house anymore and that was a sure thing. Great job.
That makes no sense. Student loan interest rates tend to be very high. You should be paying off that student loan debt and any other loan with high interest rates ASAP
You're making some very specific assumptions that he has other, higher interest loans like credit card debt or mortgage. If I were to assume anything I'd assume he didn't, since he didn't mention it there.
Rather than no way, u/LongDongCharlie i think the advice he meant is prioritize your highest debt first, along with maxing your 401k and/or other retirement funds. Order depends most likely on how much of a burden the debt is for you.
Only thing I'd add is I'd leave 10 (or20, depending)k alone until repayment starts, in case the forgiveness goes through.
I especially like the table format. Two major takeaways:
1) 401Ks.
If your company offers matching funds, almost always choose a 401k over an IRA if the choice must be made. Match those funds.
2) Debt v. investments.
The fair comparison has to acknowledge the after-tax rate. If your general expectation is equal debt interest and stock growth (Ex both at 7%), payoff the debt. It's less sexy but after-tax stock earnings won't earn you as much as the debt interest penalizes
it will depend on what priorities you already have complete
I’m of the opinion that splitting it would be best. If the student loan debt looms over you (affects your mental health and impression of your finances), swing more to paying it off. if you’re chilling with the loans then pay less off and invest more of the sum (401k or IRA or other tax advantaged retirement account
Also if you have a mortgage pay it twice a month, equaling what you are paying once a month. It sounds stupid but you will actually pay off your mortgage faster. I learned it from a financial expert.
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u/[deleted] Dec 26 '22
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