Opinion on paying off Mortgage / financial opinion
- Thread starter 03cobra#2
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No offense to anyone here, but I'll take my chances "bouncing" ideas off a professional as opposed to a bunch of dudes on a car forum.
I'm glad you guys find a little humor in these threads. If you don't have humor what do you have? Everyone seems to be a millionaire lol.
I'm trying to hit that mark between savings and home equity by the time I'm 45. That's why I started this thread. I don't want to do it using bitcoin like everyone else I work with. Time to buckle down.
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Yes and no. I have Co workers I've seen make A Lot of money in just a couple years using strickly online advice. In fact he just picked up his GT3 a few days ago and is paying off his mortgage.
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I get it, the problem is knowing which advice to take, and nobody wants to brag when they lose their ass over the bad advice they got either.
Opinions are all over the map in here. Good luck...
Look up what the tax will be like and what the mandatory withdraw will do to you with the inheritance 401k. I would talk with a financial pro quickly.
It may be smarter to cash it out now, and move it into a real estate vehicle so that you can change it into capital gains tax code money instead of personal income tax code money.
15-20% vs 29-39% investment, and bracket dependent.
It may be smarter to cash it out now, and move it into a real estate vehicle so that you can change it into capital gains tax code money instead of personal income tax code money.
15-20% vs 29-39% investment, and bracket dependent.
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For that, in Southern California, you can get a small home in places like Lancaster, Yucca Valley, Barstow, Etc. (The equivalent of living on Mars).
*Sigh, our housing marked is crazy.
Nobody said SELL it...pay the damned thing off.
First and foremost i did not read every response here. I was a financial adviser years ago, let me see if i can remember everything, but ultimately cashing 401k to pay off a house is not a good idea.
You'll incur an upfront tax penalty (assuming you are younger than 59 and 1/2) because your typical retirement account is funded with pre tax funds, and obviously has grown tax free. The upfront penalty is 10%, but that money will also count as taxable income for the year and push you into a higher bracket, so if you do this, you will be paying taxes on ~180K for that year, not just your normal 80. That is a lot of money to just throw away, and a lot more in taxes and penalties than you would otherwise be paying in interest on your mortgage, especially when you consider mortgage interest is tax deductible.
You also need to understand how compound interest works, and this is a strong market that can do wonders for a 401k, this is not the time to be pulling ~100k out. Not to mention depending on your age, ~275k a person really is not that much in the grand scheme of things. I'd just keep piling the money away and letting it do its thing.
You'll incur an upfront tax penalty (assuming you are younger than 59 and 1/2) because your typical retirement account is funded with pre tax funds, and obviously has grown tax free. The upfront penalty is 10%, but that money will also count as taxable income for the year and push you into a higher bracket, so if you do this, you will be paying taxes on ~180K for that year, not just your normal 80. That is a lot of money to just throw away, and a lot more in taxes and penalties than you would otherwise be paying in interest on your mortgage, especially when you consider mortgage interest is tax deductible.
You also need to understand how compound interest works, and this is a strong market that can do wonders for a 401k, this is not the time to be pulling ~100k out. Not to mention depending on your age, ~275k a person really is not that much in the grand scheme of things. I'd just keep piling the money away and letting it do its thing.
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