Hi everyone! I need a bit of advice from the Mustachians out there...I am due to receive a $15k bonus at the end of the month and am trying to decide what to do with it. I could:
- Contribute to my wife’s solo 401(k), which has just over $13k in tax-advantaged space remaining for 2017
OR
- Pay Off my 401(k) loan, which has a balance just over $12k, with 2.5 years left to pay it off. This equates to a ~$420/month drain on my monthly cash flow.
OR
- Something else?
I am currently leaning towards contributing the max towards the solo 401(k) and then work to accelerate paying off the 401(k) loan throughout the remainder of 2018. My thinking is that I’m in the 25% bracket for 2017, will be 22% in 2018, and I’ll never recover the chance to max out the solo 401(k) for 2017 again. On the other hand, it would be great to have the $420/month back in the paycheck.
What would you do?