What to do with 100K Windfall?

[beastmode]

Hi everyone,

I was lucky enough to get a nice boost right before starting as an attending but struggling with what to do with the cash. Current plan:

32 yo married with newborn. Plan to rent for at least a couple years.

Options:

-Payback 50k student loan at 6%

-Save for house down payment (HCOL so need around 250-300k)

-Fund backdoor roth IRAs for self and spouse for 2017 (11k) then immediately in 2018 (11k)

-401k has mega backdoor option up to ~30k

-Tesla

Thanks!

[jhwkr542]

Priority would be to make sure you know what the tax implications are (how much you're going to owe on it, so you can plan out how much you have to work with).  I'd refinance the loans.  Then probably backdoor roths (assuming 401ks already maxed) and apply some towards loans.

[artemis]

I'd pay off the loan for sure, as that's a guaranteed 6% rate of return.  After that, I'd do the backdoor Roths ( after taking into account what jhwk542 has said regarding how much you're REALLY going to have left to work with after you've paid any taxes owed).

Sorry, no Tesla. That's for down the road when your midlife crisis hits in earnest!  

[Zaphod]

You can pay off loans, have nice emergency fund and do a either back door or taxable, max other things like HSA, etc...good choices except for the tesla.

[retinadoc]

Also, not too late to fund 2016 Roth IRA if you haven't already.

[The White Coat Investor]

I like the paying off of the loan and the maxing out of the 2016 Roths. I can't quite tell when you became an attending, but if in 2017, you might also consider a Roth conversion of any existing tax-deferred accounts. Might want to spend a little too, but unfortunately a Tesla would eat up the whole thing.

[Kamban]

pay off student loan $50K

Backdoor Roth 2016 and 2017 $22K

Rest $28K - save for house or emergency fund or mega 401K - your choice

[beastmode]

Thanks for all great responses.

Just to clarify the 100k is already post tax and I will be an attending in 2017. I funded our Roth IRAs for 2016, yay. Looks like consensus if paying off the student loan and make sure emergency fund is adequate.

For the remaining money ~40k...

-Fund my new employers Mega Backdoor Roth for 2017 (~30k limit)

-Rollover current 401k (~16k) into IRA then Roth conversion (use money to pay off taxes)

-Rollover current 401k (~16k) into new employers 401k?

[paramount]

#4, buy a used prius and use the rest for a tiny house!

[Craigy]

How can you not get rid of that baby student loan?  

You won't miss having a student loan payment.  The interest probably won't even be deductible once you're an attending.