So I have about $400 set aside for a pc upgrade...

Current specs:

Ryzen 2600 OC'd to 4.1, 16gb ddr4 3200 memory, 512gb nvme, 512gb ssd, 512gb 7200rpm for downloads storage and the ever venerable gtx 1060 6gb evga SSC edition.

I have a 27" 1080p monitor.

I run P3D 4.5 HF1(still..probably should update lol), Orbx, active sky, soft clouds yadda yadda yadda. I also have Xplane 11 which i fly once every couple weeks.

My system, contrary to what the intel fandom would have you believe runs P3D very well. See the videos from my youtube channel in the signature.

BUT it could always be better right? So for the money, I am at a crossroads between a Ryzen 3 series (3600 or 3700?) or going to a new GPU like a 2060 Super or 5700xt for the 8gb of memory and the basically double gpu performance of the 1060 which I imagine would allow me more AA or Autogen etc for the equivalent frames I am seeing now.

Your thoughts?

Yes, update the GPU first.

I would probably go for the 5700 XT rather than the 2060 S. The 5700 should give you about the same performance of the 2070 S, with a lower price, and to really use RTX at decent fps, you would probably need a 2080 Ti anyway.

The main advantage of a better GPU, would be allowing you to use the better SSAA antialiasing modes, which increase visual quality a lot, especially in PBR.

Whatever you do, do not "upgrade" your GPU to a Radeon for flight sim.  You're going to be disappointed.  AMD's driver team is too small to optimize for flight sims.  Some zealots may claim that they have no problems and that Radeon is "faster for the same price", but it doesn't apply to flight sim.  

Anyway, a 2060 Super would be a decent upgrade from a 1060 6GB, except that you only have a 1080p monitor.  I think you're going to be disappointed by a GPU upgrade unless you also upgrade your monitor at the same time.