I used to make < 2k per month after taxes. Now I just did a career switch in my mid 30s. I graduated and instantly got a job making 120k salary + 35k RSU/year. Nice change of fortune, right?
I need to know how best to handle this money. The only debt I have is a mortgage (around 80k at 5.5%). I spend very little money, don't use credit cards, and like to have lots of extra money available in case of emergency. I once had an emergency in my family and my saved up money was a life-saver. Even when I was making almost nothing, I managed to save up about 20k. But I've never invested or had a 401k, just a savings account.
I had to move to a new, higher COL city for the new job. I'm temporarily staying rent-free with a family member there while I find an apartment. I'm also talking with property management companies to rent out the mortgaged house in my previous city. Rent/utilities/internet in the new, high COL city will be my one big expense. One-bedroom apartments here are about 1.8k-3.5k depending what area I live in.
Here is what I've gotten out of reading this board so far:
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I should max out the 401k at my new job.
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I should get an IRA and max that out too.
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I should use a traditional IRA and not a Roth IRA because 1) I make too much to qualify for Roth, 2) I will probably be in a lower tax bracket when I'm retired then the one I'm suddenly in now.
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How much should I pay off the mortgage of my old property? The minimum? I don't want to sell it. It's an up and coming area and a guaranteed place to live if I ever need it.
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I have to pick what the 401k or IRA is made of. How do I know what to pick?
Submitted January 06, 2018 at 12:43AM by firstClassFunction http://ift.tt/2D0tebk
