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What will be in hand?
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Mentor
Decided to payoff my mortgage.
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If you are doing pre-tax and contribute more to 401k early in the year then you are withholding less earlier in the year and more later in the year. This is good as withholding is treated as if it's earned evenly over the course of the year even if most of it is withheld later in the year (unlike estimated payments which are applied to the day they're paid).
Sidenote - the "bad tax implications" of bonuses perception is generally rooted in the fact that the withholding rate for bonuses is often higher than a persons normal withholding rate, especially if their normal rate is low. That doesn't mean it's taxed at a higher rate, just that the withholding is higher.
Subject Expert
Or lower, depending on the bracket.
If I did 0% for my bonus, I’d miss out on my company’s match. For a while I only had my bonus set to the % I needed to get the match. Now I do the same contribution % for my base and bonus so I can max my 401k contribution.
Mentor
I have my bonus go 100% to 401k so that it finishes up maxing out early in the year.
Subject Expert
Nice.
In theory you'd want to max your 401k as early as possible (time in the market), so assuming an early year bonus payout, you'd set the contribution % to the most you can reasonably manage.
You would need to check if your company does a match true up or not. If not, then you'd want to avoid maxing early.
As far as Roth vs traditional (vs after tax if available), that's a separate discussion.
Subject Expert
This.
I am max’ing basically everything asap.
Subject Expert
I just leave it the same so I don't have to think about it.