Additional 10k - Roth, 529 or Mortgage
Additional 10k - Roth, 529 or Mortgage
Hi,
I have additional 10K and also have my emergency fund. What should be the boglehead approach where to put it
Option 1 : Should I put as additional Principal for my Mortgage which is 700K @ 3.25%
Option 2 : Put 10K in Roth IRA
Option 3 : Put 10K in 529 to fund kids education (Kids are 5 and 2)
Thanks,
JR
I have additional 10K and also have my emergency fund. What should be the boglehead approach where to put it
Option 1 : Should I put as additional Principal for my Mortgage which is 700K @ 3.25%
Option 2 : Put 10K in Roth IRA
Option 3 : Put 10K in 529 to fund kids education (Kids are 5 and 2)
Thanks,
JR
Thanks, |
FB
Re: Additional 10k - Roth, 529 or Mortgage
Your marginal tax bracket? do you itemize? The mortgage interest tax subsidy shifts these numbers.
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Re: Additional 10k - Roth, 529 or Mortgage
Roth - you'll never get that space back again, unless you practice Roth conversions at later age and you'll miss out on tax-free compounding.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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Re: Additional 10k - Roth, 529 or Mortgage
Another vote for Roth. I just threw $11,000 into backdoors this morning. Took it out of my emergency fund even.
Re: Additional 10k - Roth, 529 or Mortgage
Roth IRA. If your retirement funding is already more than adequate than you can consider the 529, but most people aren't going to contribute to a 529 until they max out their retirement accounts first.
Even a stopped clock is right twice a day.
Re: Additional 10k - Roth, 529 or Mortgage
bnes wrote:Your marginal tax bracket? do you itemize? The mortgage interest tax subsidy shifts these numbers.
Am in 25%.
I bought the house this year so will be itemizing from next year.
Thanks,
JR
Last edited by FB01 on Thu Aug 11, 2016 4:49 pm, edited 1 time in total.
Thanks, |
FB
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Re: Additional 10k - Roth, 529 or Mortgage
Roth! Just my opinion.
Where the tides of fortune take us, no man can know.
Re: Additional 10k - Roth, 529 or Mortgage
Roth, unless you are (or, with maximum 401k contributions, could be) in the part of the 25% bracket that would allow a deductible traditional IRA contribution - in which case, tIRA.
- ruralavalon
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Re: Additional 10k - Roth, 529 or Mortgage
Of the choices you listed, a Roth IRA.
Are you contributing the maximum of $18k/yr to your 401k or other work-based account?
Are you contributing the maximum of $18k/yr to your 401k or other work-based account?
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy