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Edy

Curious Investment Question

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Hello. I am curious and would like to hear opinions of others-investors and advisors.

 

The numbers are merely for illustration of the point.

 

Would you prefer to:

 

A. Have a total of $1,200,000 at retirement in investment accounts in IRAs, 403b, 457 (both spouses are teachers) and still owe on the house, the children's college loans, HELOC, credit card, etc.

 

OR

 

B. Have a total of $600,000 and not owe other than perhaps one credit card.

 

I am curious to what other folks think on this. For me, I prefer option A.

 

Thank you for responding,

Edy

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Hello. I am curious and would like to hear opinions of others-investors and advisors.

 

The numbers are merely for illustration of the point.

 

Would you prefer to:

 

A. Have a total of $1,200,000 at retirement in investment accounts in IRAs, 403b, 457 (both spouses are teachers) and still owe on the house, the children's college loans, HELOC, credit card, etc.

 

OR

 

B. Have a total of $600,000 and not owe other than perhaps one credit card.

 

I am curious to what other folks think on this. For me, I prefer option A.

 

Thank you for responding,

Edy

 

This is not something for which you can get an answer off of the internet- You need to consult a tax advisor or Certified Financial planner to determine what you options are after reviewing your assets and liabilities.

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Edy,

Both options are good. From the stand point of the average 55 year old has about $60,000 saved for retirement and owes on the house, both of your options are good. I would pick either one.

Steve

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Edy,

Both options are good. From the stand point of the average 55 year old has about $60,000 saved for retirement and owes on the house, both of your options are good. I would pick either one.

Steve

 

 

Steve:

 

Can you explain to Edy the tax impact of using pre tax money to pay off debts which are tax deductible such as student loans, mortgage, etc and when paying off such loans is a good choice.

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don't know what you are talking about. You are reading more into the options than what was presented. Besides, I am trying to prepare for work tomorrow.

Good night,

Steve

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don't know what you are talking about. You are reading more into the options than what was presented. Besides, I am trying to prepare for work tomorrow.

Good night,

Steve

 

 

Well then you should not be answering questions if you dont understand the issues involved which is why I suggested a tax advisor or planner who has the skills to properly evaluate the savings in paying off debt which is subject to a tax deduction.

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Excuse me, Edy, intruder says that I don't know what I am talking about. He/she is a "professional" and I am not supposed to give you my OPINION. You might notice that the "pros" around here only attack us trying to assit in any way.

Its part of the job as a watch dog for these sharks. They come and go on this site, each pro replaced by another and then the new ones attack us by saying the same thing--"you don't have enough information about blah, blah, blah." They are really pathetic creatures. They have been relegated to selling or consulting in the 403b world.

I withdraw my post. I really did not know you had asked for estate planning too!

Silly me, according to this "pro" and other "pros", I am just a dumn a.... teacher.

Steve

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Steve, thank you for your comment. Intruder, I asked a simple question for opinions. I gave mine. I would prefer to have a large account and still owe rather than a small account and not owe. The large account give options that include paying the bills and other options. Which would you prefer?

 

I simply asked for opinions of others. I know there are tax planning issues, etc. but I was simply asking for opinions from readers/403b investors from this site. As I stated, I am merely curious as to the general thinking of others. Put in $15,500 to the 403b and pay the minimum on the mortgage or invest $3,000 annually and over pay the mortgage.

 

Steve was the only person to give a response.

 

Simple question to which I am still curious. Although seemingly little interest is in this topic.

 

Edy

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Guest Skeptical
Steve, thank you for your comment. Intruder, I asked a simple question for opinions. I gave mine. I would prefer to have a large account and still owe rather than a small account and not owe. The large account give options that include paying the bills and other options. Which would you prefer?

 

I simply asked for opinions of others. I know there are tax planning issues, etc. but I was simply asking for opinions from readers/403b investors from this site. As I stated, I am merely curious as to the general thinking of others. Put in $15,500 to the 403b and pay the minimum on the mortgage or invest $3,000 annually and over pay the mortgage.

 

Steve was the only person to give a response.

 

Simple question to which I am still curious. Although seemingly little interest is in this topic.

 

Edy

 

That is a pretty big question and I could make the case for and against either option. That said, every single dollar you withdraw from that pre-tax retirement account will be fully taxable. On the other hand you could borrow against the value of your property 'tax free' if you need additional liquidity. For most folks I think less debt is better than more debt and that is just an opinion. If your looking to solve the riddle in your last post "the max to the 403b and minimum on the mortage??" there are of course way too many variables for an absolute answer. Just my two cents.

 

Jim

 

 

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Steve, thank you for your comment. Intruder, I asked a simple question for opinions. I gave mine. I would prefer to have a large account and still owe rather than a small account and not owe. The large account give options that include paying the bills and other options. Which would you prefer?

 

I simply asked for opinions of others. I know there are tax planning issues, etc. but I was simply asking for opinions from readers/403b investors from this site. As I stated, I am merely curious as to the general thinking of others. Put in $15,500 to the 403b and pay the minimum on the mortgage or invest $3,000 annually and over pay the mortgage.

 

Steve was the only person to give a response.

 

Simple question to which I am still curious. Although seemingly little interest is in this topic.

 

Edy

 

That is a pretty big question and I could make the case for and against either option. That said, every single dollar you withdraw from that pre-tax retirement account will be fully taxable. On the other hand you could borrow against the value of your property 'tax free' if you need additional liquidity. For most folks I think less debt is better than more debt and that is just an opinion. If your looking to solve the riddle in your last post "the max to the 403b and minimum on the mortage??" there are of course way too many variables for an absolute answer. Just my two cents.

 

Jim

 

Edy: whether you should make additional payments on your mge is a complex question which depends on you mge rate, tax bracket, investment oppportunites etc. Paying off the mge makes sense if it is a high rate mge but only if you cant refinance. Mge rates are falling to lows of 6% (5% for 15 yr mges) and it may be better to refinance and get a lower rate and invest the savings on interest payments. It may be advantageous to put extra cash in a roth IRA instead of additional mge payments. This is why you need to talk to a tax advisor or planner.

 

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Hello. I am curious and would like to hear opinions of others-investors and advisors.

 

The numbers are merely for illustration of the point.

 

Would you prefer to:

 

A. Have a total of $1,200,000 at retirement in investment accounts in IRAs, 403b, 457 (both spouses are teachers) and still owe on the house, the children's college loans, HELOC, credit card, etc.

 

OR

 

B. Have a total of $600,000 and not owe other than perhaps one credit card.

 

I am curious to what other folks think on this. For me, I prefer option A.

 

Thank you for responding,

Edy

 

Edy

 

If your investments are earning more than your debt, keep the debt.

 

If your debt is costing you more than you are earning, get rid of the debt.

 

 

 

 

 

 

 

 

 

 

 

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Hello. I am curious and would like to hear opinions of others-investors and advisors.

 

The numbers are merely for illustration of the point.

 

Would you prefer to:

 

A. Have a total of $1,200,000 at retirement in investment accounts in IRAs, 403b, 457 (both spouses are teachers) and still owe on the house, the children's college loans, HELOC, credit card, etc.

 

OR

 

B. Have a total of $600,000 and not owe other than perhaps one credit card.

 

I am curious to what other folks think on this. For me, I prefer option A.

 

Thank you for responding,

Edy

 

Edy

 

If your investments are earning more than your debt, keep the debt.

 

If your debt is costing you more than you are earning, get rid of the debt.

 

Ricky Boobie:

 

1. If the investments earn more than the debt because there is no tax (Roth IRA) should you keep the debt?

 

2. How much does the debt "cost" if it is tax deductible?

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Hello. I am curious and would like to hear opinions of others-investors and advisors.

 

The numbers are merely for illustration of the point.

 

Would you prefer to:

 

A. Have a total of $1,200,000 at retirement in investment accounts in IRAs, 403b, 457 (both spouses are teachers) and still owe on the house, the children's college loans, HELOC, credit card, etc.

 

OR

 

B. Have a total of $600,000 and not owe other than perhaps one credit card.

 

I am curious to what other folks think on this. For me, I prefer option A.

 

Thank you for responding,

Edy

 

 

Edy

 

If your investments are earning more than your debt, keep the debt.

 

If your debt is costing you more than you are earning, get rid of the debt.

 

 

Ricky Boobie:

 

1. If the investments earn more than the debt because there is no tax (Roth IRA) should you keep the debt?

 

2. How much does the debt "cost" if it is tax deductible?

 

 

 

I can't understand a word you've said the whole time.

 

 

 

 

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Hello. I am curious and would like to hear opinions of others-investors and advisors.

 

The numbers are merely for illustration of the point.

 

Would you prefer to:

 

A. Have a total of $1,200,000 at retirement in investment accounts in IRAs, 403b, 457 (both spouses are teachers) and still owe on the house, the children's college loans, HELOC, credit card, etc.

 

OR

 

B. Have a total of $600,000 and not owe other than perhaps one credit card.

 

I am curious to what other folks think on this. For me, I prefer option A.

 

Thank you for responding,

Edy

 

 

Edy

 

If your investments are earning more than your debt, keep the debt.

 

If your debt is costing you more than you are earning, get rid of the debt.

 

 

Ricky Boobie:

 

1. If the investments earn more than the debt because there is no tax (Roth IRA) should you keep the debt?

 

2. How much does the debt "cost" if it is tax deductible?

 

 

 

I can't understand a word you've said the whole time.

 

 

You couldn't spell cat if you were spotted the c and the a.

 

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Edy --

 

I would for the time being invest every penny I could get my hands on in the 403b.... probably WORSE options will be available after 1/1/09, so you might as well put money there while you can and re-consider your options after that time. Make hay while the sun shines.

 

After 1/1/09 I would take all my data on debt and investments to a CPA and pay for 2 hours of his/her time to figure out what would be the best course of action, considering taxes and all.

 

In Stanley's book "The Millionaire Next Door" he found that wealthy folk skimped on lots of things -- but never on good lawyers or good accountants. I have taken that idea seriously ever since.

 

JudyS

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