I'm 31 years old, single, live in NYC, no debt. I recently got a raise at work and want to be smart about where I put it. Raise adds about 6k to my salary, pre-tax.
I have a little over 70k in investments (I started late at age 26) and 4k in my down payment fund (goal is 40k).
Pro for 401k: With the new raise I'm finally in a position where I could max out my 401k without totally struggling. I don't plan on staying at my job forever so I foresee gaps in my future where I wouldn't have a 401k to contribute to at all. I'm single, no kids...why not save often and early while I can?
Pro for down payment: The plan would be to get a modest 2-bedroom condo where I could live in one room, then rent out the other. I would make sure that the mortgage would not be much more than what I'm currently spending in rent. Eventually I'd be able to rent out both bedrooms if I needed to.
My current monthly paycheck and spending:
5401 gross pay
112 subway pass
208 flexible spending account*
810.16 401k (15%) - not including 6% employer match
2793.46 take-home pay
420 roth ira
150 travel
50 education
870 rent
50 utilities
38 phone
300 food
266 health & fitness*
250 shopping
130 entertainment
68 doctor
50 personal care
50 auto and transport
35 gifts
*atypical spending due to planned medical procedures.
I think I'm already doing alright for myself, but regardless of which option I pick, once the medical stuff is over, I'm going to start paying myself an additional $500/month for the house down payment. But what would you do with the raise money--put it into the 401k or into the house down payment?