u/WhiteCollar-Dave

Hi I would like some guidance given my current situation.

For context, I am a mid 20's individual.
My current job was paying $77,330 salary in a lowish cost of living area (index of 94, which is 6% lower than the national average).

I have received a raise on April 15th that bumped that up to ~$85,000

I just accepted a new job offer that does not require me to move that has increased my salary to $115,000 + 5k sign on bonus.

Current job is matching 5% into a 401k while I contribute 6%. For the first few years, I have contributed ~8% so getting ~%13 in there. Current 401k balance is sitting at $40,000.

I purchased my first home at the end of '24 for 26K down, 209k loan at a 5.375% fixed interest rate.

I have not made any extra payments towards principal in this time so ~$204,000 is still owed on that.

Since purchasing I have had a hard time saving any money due to unforeseen bills (dog with cancer, tree removal for dead pine trees, etc.) but I am "hopefully" past those for now and no debts accrued due to them, just no money really saved.

My new jobs 401k will match 1:1 up to 6%.

I am not sure about the eligibility to roll my current 401k into that plan, or if I will have to go the IRA route with that money (I am not really sure on what that will look like either way).

My first goal is to finally save up a 6-9 month emergency fund. I estimate I need about $3k (2.5k minimum) a month for housing/dog medicines/food/utilities.

My long term goal is to buy a house a more desirable, to me, area. Right now that would probably cost 400-450k. I plan to stay in my current house for 5-10 more years, and evaluate selling based on that future market when the time comes. I would also like to retire early (like 50-55) if the future market and healthcare costs allow.

I do not plan on having children which is a nice relief.

What would you do with this extra income after you have built up your emergency fund?

1 Take the guaranteed 5.37% return by throwing extra at mortgage?
2 Fill up an IRA with the yearly limit?
3 Contribute more to my 401k?
4 Invest in a personal brokerage account so that I don't have to wait until 59 1/2 to take out any money?

If you say option 2, can you please ELI5 how that is the right call here? IRA just confuses me outside of my basic understanding that it is another "tax advantaged" retirement plan. The whole 59 1/2 with no penalties really make me hesitant on throwing more at retirement given that I want out of the rat race before 55.