Both my spouse and I work for the same small business. We both contributed the maximum amount to our 401k, but no one else really did, so we failed the discrimination testing (bunch of bs...but that is another topic). We are getting back roughly 12k a piece that we will have to pay taxes on now. Roughly 7k in taxes total (ouch!). What I am wondering is what to do for the future? We want to retire early and the bad thing with the 401k is we cannot touch that until we are 59.5, but also that is a benefit. We make too much to contribute to a Roth IRA and I know we could contribute to a Traditional and then immediately transfer it to a Roth, but is that the best idea? And what should we do with the rest of the money? Or should we do something else? The great thing is that we didn't see this money, it just went right to retirement. Obviously we need to stop maxing out our 401k's but where should we put that money and how can I do it so we don't think about what we could have spent that money on?