401K question- spread out vs lump

[badgergrl]

My husband is set to get a large bonus at the start of 2013 Unlike past years, we don't have a set plan for this money (maybe just putting it away for future downpayment for our forever home?).

We max out his 401K. We can opt to have that just come out of his bonus in January vs. spreading it out over the course of the year. Any advice on which is better? The advantage I see is that we don't have to give the Fed 40% of as much money as a loan since bonuses are taxed initially so much higher. The negative I see is if the market tanks early next year (which may be more likely this year with the cliff situation) we "lose" more than we would have if we spread it out over the year.

THANKS!

[kadams767]

Does his company provide any sort of match? If so, will they still provide a match based on his entire year compensation if he isn't contributing over the entire year?

[cjeanette]

I would prefer to spread it out over the course of the year or set part of the investment option to a money market and move into other funds over the year.

[badgergrl]

No Match. He does get profit sharing, but it doesn't have any link to his contributions.