The Money Mustache Community

Learning, Sharing, and Teaching => Investor Alley => Topic started by: RH on November 28, 2014, 12:34:19 PM

Title: What to do with Bonus?
Post by: RH on November 28, 2014, 12:34:19 PM

Hi,

I'm fortunate enough to be getting a $25K bonus in Dec. What should I do with the money?

About us:
35 years old
$250K in 401K
$40K in Roth
$60K in savings (I know...I need to invest)
$200K equity in rental property
$150K equity in primary residence
zero debt except for Mortgages

I've only contributed $5K into 401K this year and zero into Roth.

I have a feeling I should start investing the funds in a regular vanguard brokerage account so that we can access the funds when do to the Roth IRA conversion ladder in 10 years. Thoughts?

Thanks

Title: Re: What to do with Bonus?
Post by: stuckinmn on November 28, 2014, 02:57:40 PM

What's your marginal tax rate?  If you're getting a 25k bonus it's probably higher.  I'd put as much as your plan allows in your 401k, then to roth, then to taxable.

Title: Re: What to do with Bonus?
Post by: hodedofome on November 28, 2014, 06:05:32 PM

Help out the economy and buy an OLED TV.

Title: Re: What to do with Bonus?
Post by: Gin1984 on November 28, 2014, 06:20:57 PM

What is your mortgage debt amount?

Title: Re: What to do with Bonus?
Post by: TheThirstyStag on November 28, 2014, 10:37:25 PM

Quote from: Gin1984 on November 28, 2014, 06:20:57 PM

What is your mortgage debt amount?

This is a good question.  If it's significant, you might want to consider paying it down somewhat with your bonus.