Hi! I’m newer to investing in the last year or so… I have my standard monthly contribution going into 2 index funds through a TFSA (I think Roth equivalent in US)
I started a new job where they give quarterly bonuses. What is the recommended % of the gross bonus amount to put into an index fund? I’ve heard everything from 20% to 50%. (Tax rate on the gross is about 42%). Thanks for any help!
Welcome Stephanie!
WELL… I guess it kinda depends on your goals. If you’re considering spending vs investing it, then the more you invest the more wealthy or sooner you’ll be able to retire. i.e. if you invest ALL of it, that would maximize your path toward an early retirement.
I think IN GENERAL, you always want to make sure you’re on pace to have a healthy retirement by the age you want to retire. You can try putting your numbers into this retirement calculator to see how you’re doing (try using 7% as a reasonable growth rate):
Or are you asking about taxes? Are taxes withheld from the bonus? If not, I’d definitely set aside everything you will owe in taxes and keep that in cash. You don’t want to invest money that is owed soon.