Author Topic: Critique my plan for the year...  (Read 2969 times)

Bikesy

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Critique my plan for the year...
« on: July 08, 2014, 06:16:19 AM »
Ok Team,

I have a bit of an interesting, atypical financial situation this year.  I recently took a new job in a new city for a pretty nice pay bump...Yay!  20k of my 96k pay for the year will be given to me as a bonus with my first pay check.  This bonus money would need to be paid back on a prorated basis if I would get fired/quit within the first year.  I need a little help with planning how to best utilize this money.  I'm planning on receiving 15k after 25% tax on bonus (is this right?).  My plan is as follows:

1. Utilize bonus money to finish funding our TIRAs for the year (approx 7k).  I have enough roth contributions to cover the entire bonus amount if it needed to be paid back.

2a. Keep the rest (8k) in our Emergency Fund savings account...This would bring the total to 13k (6 months of bare bones expenses).

2b. Keep our Cash EF at 5k and use the rest (8k) to start a taxable account, knowing this could serve as emergency money if needed.  I would also be able to start contributing a small amount to this every month.

Other Info:  I will be maxing my 401k and HSA through payroll contributions this year.


So what to do...A, B, or other?  I want to do B.  I think if I start a taxable account while I have a lump sum it will be more motivation to contribute monthly, even if its a small amount.

Thanks for your thoughts!


matchewed

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Re: Critique my plan for the year...
« Reply #1 on: July 08, 2014, 06:19:26 AM »
Do you think you'll stay there the year?

If so then just do with the money as you would if you'd received it in paychecks. Just quicker :).

Do you need an emergency fund of 13k? Is that what you want? Does your investment plan ask for you to max out a traditional IRA or invest in a taxable?

JCfire

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Re: Critique my plan for the year...
« Reply #2 on: July 08, 2014, 06:25:41 AM »
I would invest the 8k in a taxable account in your situation.  You run the risk of having to sell your investments when they are down if that's when you need them, but in the grand scheme of things I think you can afford to take that risk with about 2-3 months of expenses already in an e-fund.  All depends on your personal comfort /risk tolerance though.

Cheddar Stacker

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Re: Critique my plan for the year...
« Reply #3 on: July 08, 2014, 10:01:30 AM »
B.

Congrats on the new gig. Now just don't get fired in the next year.

ampersand

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Re: Critique my plan for the year...
« Reply #4 on: July 10, 2014, 10:40:18 PM »
Congrats!  I agree with JCfire, taxable brokerage account. I use optionhouse ($4 a trade).


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mxt0133

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Re: Critique my plan for the year...
« Reply #5 on: July 11, 2014, 12:45:24 AM »
B and I would personally go with Vanguard and to the broad index route.

Bikesy

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Re: Critique my plan for the year...
« Reply #6 on: July 11, 2014, 06:02:41 PM »
Thanks for all input!  I'll post an update when everything is squared away!

jabber

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Re: Critique my plan for the year...
« Reply #7 on: July 20, 2014, 05:29:37 PM »
You've crafted a narrow investing, type question.  Are there any areas that you could "beat the market with..." ways that you might optimize other areas of life? If you are going to stick with straight up investing decisions, you may be deferring these types of decisions down the road, as money is fungible.