I have earned a large bonus ($34K) that I should receive in early Nov. So basically, what would you do with this bonus?
I know some folks around here earn much larger bonuses, but this is the most money I've ever earned at one time in my professional life. Even assuming it's just $24K or so after taxes, it's still a big chunk of change.
We are considering two main options:
1) Pouring it into my 401k by hugely upping my contribution this year (would take about $15K of it), paying off the car, and putting the rest, about $4K on student loans. It would be awesome to max out my 401k this year, especially since I'll almost certainly move into "HCE" territory next year, which will affect my ability to contribute in 2019.
2) Taking the bonus, pulling out about $22K in cash, and paying off my student loans. I am 44 years old, and the thought of paying off my student loans this year fills me with...just unmitigated joy. I mean, you have no idea. Yes, the loans are at a low rate, but they wear heavily on my psyche, like a rusty anchor chaining me to the murky ocean depths.
Thoughts?
If it helps, our abbreviated vitals are below:
Us: Married couple, 44/39, both work FT, have two kiddos, 9 and 13 going to public school
Income: Me (roughly $100K/year including bonuses) Her (roughly $55K/year, including bonuses) My Side Business (about $15K/year)
Monthly: Each month we have enough to put in about $750 in my 401k and $1500 in my wife's 401k, so $2,250 total each month. Roth IRAs are maxed for the year. No taxable accounts. We could have been putting more into savings these last few months but we are cash flowing a large vacation for spring.
Assets:
Home: Value $200K
Stache: Combination of 401ks, IRAs, current total balance: $177K
Cash: Approximately $30K
Cars: $18K
Home Stuff: $5K
Total Assets: $430K
Liabilities:
Mortgage: $126K, Year 1.5 into a 30 year term, 3.75%, currently paying about $950 monthly including escrow (not paying any extra)
Student Loans: $46K, at 4.25%, currently paying $1K per month
Car 2: $3.5K at 1.99%
Total Liabilities: $177,500
Net Worth: $254.5K