I got a 20% raise yesterday. $120 --> $144k (plus $7k-$10k annual bonuses). I also just paid off my car which frees up $500/month. What should I do with the extra income? Right now I basically break even when factoring in mortgage, gas/food, insurance, preschool costs, and 5% contribution to retirement (with employer match). I live in a moderately HCOL area, for context. I'm looking at an extra $1800 now per month post-tax. I'm thinking of increasing retirement contributions, put a couple hundred extra a month toward mortgage principal (5.625% interest rate), putting a little into kids college funds, and saving up what remains in HYSA for emergencies and home projects. Anything else I'm missing?
not your personal blog, faggot
go back you wagie normie niggerfaggot
Grats. Pay min on mortgage, no extra. Put extra into roth ira until maxed. Rest into roth 401k if available.
You need to max your retirement BEFORE accounting for housing. 401k, roth, and 1k into the market in a brokerage monthly. If this is not possible move to a location that makes this possible
>>62363668Why not extra into mortgage? Because interest is low enough that investments will yield more? I just hate being in debt.
>>62363673Same question (>>62363674). I can't exactly move. I have one of those hard-to-get, amazing jobs and I can't just get another so easily.
>>62363674Im assuming that based off your income and preschool comment you are married with atleast 1 kid. That puts you in basically zero percent tax bracket after 401k match and hsa unlessyour wife also works. Thats when you roth max...or i you have balls margin max in a brokerage, but macro wise now is not the time to do that+roth gives you the option to pull out contributions if needed. Not enough info given to make a call on a lot of advice, but paying down <7% mortgage isnt wise in any case. Maybe if youre close to getting out of pmi range or dont want to insure the house because you can fix it yourself cheaper tjan insurance costs over time.
>>62363696Nope I have no PMI. But I have two kids. Mortgage is $3184/month. My wife doesn't work. So my absolute first move should be increase 401k payments, it seems. I can't put all the extra money in it cause I have more short-term goals. Under my new salary, my 5% contribution would be $600/month, matched another $600 by employer. That's $14,420/year. Maybe I'll contribute an extra $465/month to make it an even $20/year. My wife and I have approx. $130k in retirement already (I'm 32, she's 30). She will hopefully be returning to work in a couple years which will help. Anyways I apologize for the blogposting.
>>62363674Yes because you can make much more especially with compounding than that interest rate. Inflation is at least 4% realistically, you can eventually pay that off easier as cash becomes more worthless.>>62363696Must be underage. He is no where near 0% bracket at that income. PMI has nothing to do with insuring your house. If you have a mortgage you have to have home insurance. PMI is if you have less than 20% equity in your home it is extra completely separate from home insurance due to being higher risk brokie.
>>62363716>wife doesnt work>2 kids>preschool??? Is your wife a retard or a frail Victorian child?
>>62363716Just educate yourself on all the tax code and pitfalls and even think outside the box. If your 401k has good fund option, low fees, or is even self directed if youre lucky, I woudn't hesitate to up contributions. I personally max my 401k and have been lucky taking out loans when the market peaks then reinvest in my brokerage after a dip (got one right before the yen carry dump and tariff bullshit). I can grab the tax deduction and still keep the brokerage up, but I wont pretend it wasnt a little luck. If youre only in the 10/12% bracket thats not as much bang for the risk. My job is also pretty safe..biggest risk is me rag quitting and having those loan outstanding is keeping me in a few more years for better or worse.
>>62363745Im not even suggesting to pay it down early. Mayb make a few payments if he ws close to 20% or pay it off completely if he wants to forgo insurance entirely or there are declvelopment plans the bank wont like. And if you think someone cant get their taxes down to zero at that income or significiantly higher, youre the brokie.
>>62363770>just send $5k+/month to full-time daycareThe preschool is part-time for my older son's benefit; not a childcare center.
>>62363657>5% contribution to retirementthat's pretty low (even with employer match), but I wouldn't put any more into the 401k. Plunk the rest of your free cash into a Roth IRA at your favorite brokerage firm (I like Schwab because it's also a FDIC bank, but Vanguard and Fidelity are also fine).
>>62363657>Right now I basically break eveni hope your bitch is working.
>>62363745>you can make much more especially with compounding1965-1982 and 2000-2012 say "hi". Paying off the mortgage is a guaranteed win. Playing the market is only a win as long as line goes up.
Roth IRA 50/50 SCHD and VT
>>62363657If you don't have an emergency fund, prioritize that. 3-6 months, but I'd aim closer to 6 with kids. Also, what a lot of people don't consider is building additional dedicated savings funds for known irregular expenses. (For example, you know you will eventually need a new roof, so start putting a little away every month now instead of needing to take out a loan in the future) You could save for a new car, computer, mattress, air conditioning unit, etc. this way. Think of expensive things you own that will eventually need to be replaced and start saving a little each month now for them so that down the line you aren't having to pay some interest to some jew to borrow his money in a lump sum.The rest of your plan sounds good. Congrats on the raise!
>>62363674Can you recast your mortgage? Given that your mortgage interest is greater than the risk-free rate, that would be a reasonable move. But otherwise, you should never put more into your mortgage payments than necessary because it affords you no benefit. If nothing else, you could just save the extra money in an emergency fund, to pay the mortgage in a later month if you lose your source of income.
>>62364061The cost of daycare for two kids would basically be $60k/year where we live so there's no point in her working. We were also moving around a lot the last four years to get to my current long-term career so she didn't exactly have the opportunity to career build. She will be working once the younger one is in kindergarten. >>62364055Is the idea that it's good to diversify between pre-tax and post-tax contributions? >>62364143Yea , you get it. It's why I can't fully commit to retirement funds. We need a new driveway in the next couple years, for instance. This raise makes it possible. The bugger question is what's the ideal breakdown for allocation. >>62364145We actually financed from 6.99% to 5.625% back in...April I think? With no points. Literally the day before Trump starting bombing Iran. Mortgage payment was supposed to go down $300/month but property taxes were raised so it only went down $200...
>>62363657But do you have seven figures? If not, you're still lower class according to /biz/
>>62364224>it's good to diversify between pre-tax and post-tax contributionsYes. Withdrawing from pre-tax accounts counts as income, and you pay income tax on it. But that income also affects things like medicare payments and so forth, so you want the ability to control how much of your retirement money is income and how much is tax free (Roth). It's also good to diversify between retirement and non-retirement accounts, so set up a regular brokerage account and contribute to it as well, you'll pay capital gains taxes but those are much lower than income taxes (0% up to $98k/yr if you're married filing jointly), and that also doesn't count as income. That'll give you something you can tap into if you or your wife need to retire early, e.g. to take care of a parent or something.
>>62364224man you have two kids while being a wagie and having a mortgage?no one in your entire family tree could give you enough money to be free?and you think you were good enough to reproduce?
>>62364224>what's the ideal breakdown for allocation.There is no universal ideal, that's something that is specific to your situation. I've got about 60% of my money in pre-tax retirement accounts and I wish it were much lower. Unfortunately I've been ineligible to contribute to a Roth for most of my career, so the other 40% is in a couple of brokerage accounts that I'll have to pay capital gains taxes to access. If I were to do it again I'd only contribute enough to my 401k to get the employer match, then put the rest into an S&P 500 index fund in a brokerage account. If you can contribute to a Roth, then I'd split my non-401k contributions evenly between the Roth and brokerage funds. The 0% tax on Roth accounts is no joke, but not being able to tap into them until you're 59 1/5 is also no joke, meanwhile the relatively low capital gains tax rate takes a lot of the sting out of the brokerage accounts.
