Hi Everyone! I'm going to get around to writing a real case study soon-- but I have a quick(ish) question.
I just accepted a job offer that comes with a big pay bump (I know--don't increase cost of living!!)...but also a big commute. I have very little savings, and about 23K in student loan debt, no real emergency fund.
Old job was about $34,000/year gross - new job will be $60,000/gross. New job has a 401k that I can't start contributing to until after working there for at least 90 days. In the meantime, I'll be saving for a new (to me) car and paying down debt with the 12% that I will eventually put into the 401k. (I posted about my situation earlier here:
http://forum.mrmoneymustache.com/ask-a-mustachian/low-earning-moustachian-living/ -- that was pre the new job offer!)
I have a 457 plan (like a 403b for govt workers) from my old job that has about $3200 in it. When I leave the job in 2 weeks I can withdraw it with no penalty and just pay taxes on it, so, I'm trying to decide what to do with it. Options are:
1) Leave it where it is. It's in a managed account, has earned 7.7% over the last year. I won't be able to continue to deposit into it and I'll have to leave it there until I'm 65 (in 34 years)
2) Roll it into a traditional or Roth IRA
3) Pull it out and put it in a vanguard acct. Thus preserving some liquidity and thinking of it as an emergency emergency fund--until I get my shit together and have something built up with savings from the new job, then just treat it as my investment account
4) Pull it out and pay down my higher interest student loan - (2 loans: ~$18,000 @6.8% *ouch!* and ~$5000@3.2%) I could put $3000 towards the 18K loan.
5) Pull it out and put it towards a new car. I currently own a (sweet) 1977 mercedes benz diesel with under 110k miles on it. I get around 30mpg, but my new commute is going to be almost 30 miles each way, so I think I need a higher MPG car. Thinking about selling my classic beauty for a 2005-2008 Prius or similar. My car is probably worth about 5K, maybe more for the right buyer, add the 3K from the retirement acct and I could probably swing that. My current car is in great condition, but I only use it on the weekends (I bike to work now--going to miss my commute!), and I feel like it is a crime to put 60 miles a day on a classic, plus I could use the gas savings. And if I'm spending that much time in the car, air conditioning would be nice, not gonna lie.
So mustachians, thoughts?