Earning a year-end bonus is a rewarding accomplishment that celebrates you and the hard work you put in throughout the year. Whether it was expected or a surprise, the first question that typically comes to mind is what to do with your year-end bonus. It is easy to automatically think about spending it on a quick indulgence, but we will evaluate with you to ensure your bonus is optimized now and in the future.
Evaluating Your Short-and Long-Term Goals
At Cary Street Partners, we take the time to get to know more about you and your ambitions in life. As we talk through your upcoming plans, some aspirations may be more immediate than others. Your short-term goals are the things you wish to acquire or accomplish within the next 1-3 years, whereas your long-term goals focus on building security and stability for your later years.
We go beyond just managing portfolios — we provide personalized investment strategies designed to align with your financial goals and risk tolerance. Our approach leverages the flexibility and efficiency of ETFs and mutual funds to create diversified portfolios that are both dynamic and responsive to market conditions. By monitoring and adjusting these investments, we aim to optimize your portfolio to meet your objectives, whether you’re focused on preserving capital, generating income, or achieving long-term growth.
Understanding your timeline helps clarify how much money you should set aside and when you must start doing it. We are happy to map out your specific scenario and help you decide where your bonus money would be best spent to fulfill these wishes.
Strategic Ways to Invest Your Bonus Money
After having an idea of what your short and long-term goals are for the future, now you can better determine how your bonus money should be allocated. We are glad to walk through the options with you and figure out if it would be best for you to invest your bonus money, maximize your 401k retirement contribution, or use that money to complete your estate planning documents.
Where Should I Invest My Bonus Money?
We encourage you to use your bonus money in a way that works best for you. Instead of having it sit idly in a checking account, investing your bonus so that you can earn more over time is a smart choice. There are so many investment options out there that it can be overwhelming to choose on your own, but we at Cary Street Partners are here to help. With access to a wide-universe of investment options, we proactively narrow down appropriate options for you and your personal goals.
Should I Put My Bonus In My 401k?
Retirement can seem like it’s far away at times, but it can approach much quicker than you’d expect.
We aim to prepare you for any situation, whether you have a set age for when you’d like to stop working or are striving to retire earlier in life. However, there are some standard rules that you should be aware of before putting your bonus money into your 401k plan.
If you are asking yourself, “How much of my bonus should I put in my 401k?”, we can assist you in figuring that out. Every year, there is a maximum amount that you can allocate toward your retirement plan, and if you haven’t yet hit that number, contributing to your 401k is an excellent way to use your bonus money. There may also be some restrictions as to when you can contribute to your account and if it would be advantageous for your tax situation. Not all employers will allow you to contribute your bonus to your 401k after you receive it. If your employer does not allow for after-tax contributions like your bonus to go into your 401k, you may be able to designate a portion of your bonus to your 401k via your HR payroll team before it is processed. We at Cary Street Partners would be happy to help analyze your current circumstances and guide you to a personalized solution.
Why Should I Consider Creating My Estate Planning Documents?
As you think about ways to use your bonus money to build your wealth, it would be wise to also consider what you can do to protect those resources for your loved ones. Setting up or updating your estate planning documents helps to ensure that your assets are being distributed exactly how you wish upon your passing, while also providing guidance and clarity for the executors of your estate. Using some of your bonus to create a comprehensive estate plan can be a great way to protect your family, avoid probate, and ensure that your assets pass to your heirs the way you would like them to.
Having these documents completed can help set up strategic generational wealth for your family, or even minimize potential tax burdens for charitable or gift donations. We are here to discuss the different types of estate planning documents with you and what would be needed to fulfill your wishes.
Maximize Earnings From Your Year-End Bonus
Congratulations are in order. If you are reading this, it is likely because you have received a year-end bonus and are considering what to do with your bonus money. You have come to the right place, as we at Cary Street Partners, proud to be an industry-recognized firm, would love to help you invest your money in a way that will provide you with the most return.
Let us guide you through increasing your earning potential, adding more to your current 401k retirement plan, or helping you take care of those you love through estate planning documents. Contact us today to get started.
Paige W. Garrigan
Chief Marketing & Transitions Officer, Managing Director
The Wealth Wisdom Series is curated by Paige W. Garrigan, drawing from the experience and input from Cary Street Partners’ Financial Advisors. Collaborating internally with the team she gathers pertinent and timely topics for readers. With nearly 30 years of experience in the financial services industry, she has acquired a wealth of knowledge across various facets of the industry ensuring comprehensive insights for readers.
Cary Street Partners is the trade name used by Cary Street Partners LLC, Member FINRA/SIPC; Cary Street Partners Investment Advisory LLC and Cary Street Partners Asset Management LLC, registered investment advisers. Registration does not imply a certain level of skill or training.
Any opinions expressed here are those of the authors, and such statements or opinions do not necessarily represent the opinions of Cary Street Partners. These are statements of judgment as of a certain date and are subject to future change without notice. Future predictions are subject to certain risks and uncertainties, which could cause actual results to differ from those currently anticipated or projected.
We undertake no duty or obligation to publicly update or revise the information contained in this letter. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of securities, or information about the market, as indicative of future results.
These materials are furnished for informational and illustrative purposes only, to provide investors with an update on financial market conditions. The description of certain aspects of the market herein is a condensed summary only. Materials have been compiled from sources believed to be reliable; however, Cary Street Partners does not guarantee the accuracy or completeness of the information presented. Such information is not intended to be complete or to constitute all the information necessary to evaluate adequately the consequences of investing in any securities, financial instruments, or strategies described herein. Nothing contained herein should be considered a solicitation to purchase or sell any specific securities or investment related services.
Nothing contained herein should be considered a solicitation to purchase or sell any specific securities or investment related services. There is no assurance that any securities discussed herein have been included in an account’s portfolio, will remain in an account’s portfolio at the time you receive this report, or that securities sold have not been repurchased. The securities discussed do not represent an account’s entire portfolio and, in the aggregate, could represent only a small percentage of the portfolio’s holdings. It should not be assumed that any of the securities transactions or holdings discussed were, or will prove to be, profitable, or that the investment recommendations or decisions made in the future will be profitable or will equal the investment performance of the securities discussed herein. A complete list of every holding’s contribution to performance during the period, and the methodology of the contribution to return, is available by contacting Cary Street Partners Marketing.
Cary Street Partners is a broker-dealer and registered investment adviser and does not provide tax or legal advice; no one should act upon any tax or legal information herein without consulting a tax professional or an attorney.
IRAs, 401(k)s and other retirement plans may have fees associated with them in addition to the costs associated with investing the assets of the retirement plan. These fees may include, but are not limited to: annual account fees; administrative fees that may include recordkeeping of the plan; legal fees; accounting fees; and termination fees. Please consult with your advisor or plan sponsor to learn more about the fees associated with a particular plan. CSP2024242