We are coming into a lump sum of cash and I want to make sure I make the right choice of what to do with it. We currently invest fully in my husbands 401k and IRA as well as my IRA plus $200 per month in an index fund and $50 in a 529. We hope to retire before 59 and my husband is 10 years older than I am. I don’t get a company match so we were holding off on contributing to my 403b until we finished paying for our last year of daycare. Our two choices for the cash are:
1) Prepay for the remainder of daycare (around $18,000) and start maxing my 403b now. We would probably still have about $10,000 left to dump in an index fund at Vanguard.
2) Dump all the cash into an index fund with Vanguard, continue to pay monthly daycare costs until September 2019 and then start maxing my 403b at that point.
I lean towards #1 simply for the psychological impact of getting used to a substantially smaller paycheck coming home for me since that’s going to happen eventually anyway.
Thoughts?
1) Prepay for the remainder of daycare (around $18,000) and start maxing my 403b now. We would probably still have about $10,000 left to dump in an index fund at Vanguard.
2) Dump all the cash into an index fund with Vanguard, continue to pay monthly daycare costs until September 2019 and then start maxing my 403b at that point.
I lean towards #1 simply for the psychological impact of getting used to a substantially smaller paycheck coming home for me since that’s going to happen eventually anyway.
Thoughts?