Reply to What to do with an extra $750K?

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[quote=Anonymous]I get a large chunk of my pay in an annual bonus so I spend a lot of time figuring out what to do with windfalls. I always max out the tax advantaged savings accounts first--IRAs, 529s, etc. There may be a day where we don't need to do that, but I'd rather over save than under save. I'm 34 and I think it's smart to save as much as possible for college/retirement early because you don't know what the future holds. You can always cut back on savings if you feel you have more than enough.

If I were you, assuming you're maxing out your 401ks already, I'd put $11k into IRAs for you and your DH. Then, I'd do max $14k per child into a 529. It's a lot, but this is a one-time windfall. It may be the only time you set aside a significant amount of money in savings for them. Even though you're not worried about college funding, this is still a good use of money since the savings are tax advantaged. If you want to save more aggressively, you could each put $14k in a 529 for $28k per child. That's what we do with my annual bonuses right now.

After that, I'd pay off your DH's student loans. I wouldn't bother with yours since the interest rate is so low. Might as well take your time paying off that one. Then, get the car with $20k cash.

Assuming the net amount is $400k, you still have ~$330k (or $275k if you put $28k into the 529s) left. Shore up your cash savings first and then do the addition. If you have to finance a part of the addition, I'd go that route rather than blowing all the cash on a project that could be financed through a HELOC or construction loan at a low rate.

Regardless, if this comes through, it sounds like you'll have plenty for the addition you want and savings. Good luck![/quote]

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