Looking for input, personal time payout at work...

I have several options for personal time payout at the end of October. I will lay them out and am interested to see which option you would choose and why?

#1: Take the full pay out of 240 hours of pay, thats 6 weeks of pay. Taxes will be taxed as a bonus so subject to a higher tax rate.

#2: Take a partial pay out and roll over the remaining time, that if not used next year will be paid out in July, as of right now.

#3: Roll over the entire 240 hours, combined with my time that resets in December my hire date, would give me 10 weeks of paid time off next year, I can if I wanted to take a week off every month for 10 months.

So take the poll and let me know why you would choose what you would.

 

Can you put any of it into a 401k or other pre-tax IRA retirement plan?

 

Are you in a position to take that much time off without pissing off mgmt and co workers? I usually just roll mine over and then take every Friday off for the year as well as my normal couple week vacations a few times a year. That limits my coworker drama and gives everyone a static work schedule for me, minus the couple big vacations.

 

Also, will you get a raise between now and the time it'll automatically pay out in July?

 

If cash is tight do a partial pay out. Roll over the rest.

Otherwise roll it over, hopefully next year we can all get to taking time off again like normal, not like this year.

 

Will taking a payout this year, or next change your tax bracket? I’m assuming either payout option is taxed as bonus. If it doesn’t change your tax bracket and it is going to be taxed as bonus in either option, I personally would cash it out. I always like money in hand. I struggle taking my vacation each year so I wish my company offered a buyout option.

 

Picked #2 based on my company rules. My company allows only 80hr of PTO to be rolled over and anything in excess must be used by year end or we lose it. Not sure about your company rules, but I’d roll over everything if I could and bank all of it for a massive payout when I exit the company or retire.

 

When I retired 4 years ago, I cashed everything out and ran? Lol 16K after taxes..

Edit: Didn't realize you were just doing the yearly thing.

 

Roll it over and enjoy the time off slowly. Why give the Government more money.

 

If you cash it out yes you can roll over some of into a 401k

 

Per district and corporate hr it is my time to use as I see fit.
My decision on this would have no bearing on any one else.

 

my yearly review is actually this time of year. So no bearing on any reviews

 

the extra cash would be great but it’s not a deal breaker

 

the time is taxed as a bonus. So there is a higher tax percent for it.

 

normally we are allowed 48 hours to roll over. Anything over 48 is cashed in

this time off is in addition to all other time off.

 

one reason I am giving the roll over option a lot of thought.

 

Okay, if you know a raise is coming, then I'd wait to take it out until after the raise to maximize how much you'll get. Then the rest depends on your debt and retirement situation. If you have a lot of debt then I'd use it all to pay that off, or as much as you can. If your payout will cover your debt and then some, then only take out however much you need (after penalties) to pay off the debt and put as much as is allowed into the 401k. If you still have any left over after that, I'd be looking at an emergency fund, making principal payments on any vehicles or mortgage, or putting it into a non-work Roth IRA.

 

I'd roll the maximum amount allowed to the 401K, assuming you're currently participating in it. With the rest, keep enough for a few sanity days until it builds back up, cash out the rest and pay bills, bank it in a liquid account or treat yourself to something.

 

Also, if you have 240 hours, #3, while appealing, doesn't seem to be a viable option. I max out at 240. Not use or lose, I just stop earning it. I always take the week of the 4th and the week of Thanksgiving. I also sit at 240 most of the year. It annoys me to give away free money, but I didn't get to the level I'm at by making time off a priority. Greed and work ethic are bitches

 

Dammit, why didn't I think of that.

 

I should see my yearly on my next check. Or within the next 2 checks if the cycle holds true.

 

I thought about cashing it all and rat holing it.

 

LOL I will keep that in mind, actually thought about a LRB M14, but they are 3 months out just to get the receivers in, then teh waiting list to start the build.

Looking at maybe a Tikka hunter, cant decide on caliber or a couple more ARs.

 

This was emergency time off given to use by the company, to use as we deem needed, when the covid first hit.

The personal time I normally accrue is what will max roll over each year at 48 hours, anything over they cash out for us.

 

LOL

 

One of the reasons I might roll some or all over is the unknown of what this virus may do over the winter. To have the time in a bank so to speak to use if needed would not be a bad idea.

 

Gotcha. It really is a bad situation bonus. Sounds like HD is doing the right thing.
That said, I always prefer tax deferred options. At least as much as my weekly budget can support. I've been in a 30% bonus program with additional stock options. We don't budget based on those, so the extra goes first into my wife's IRA, second to a money market account that is liquid and, a little bit to small wants. My BD lights and my wife's wierd table lamp are the some recent examples. The plan has worked for us, the only reason I still work is insurance. I don't think you can go wrong whatever you chose.

 

I don't understand this argument. Yes, it would be considered bonus money and taxes is withheld at a higher rate than a regular paycheck but W2 income is taxed all the same. Will taking the payout push you into a next tax bracket? Do you anticipate to be in a lower tax bracket next year? If not, it makes no difference if you get the money today or next year, although people do say better to have the money now than in installments (which is why most lotto jackpot winners take the lump sum option).