My wife and I* have $230K in two 401K plans, $290K in a Defferred Compensation plan ( 1.5% return annually), $6,00 in a variable annuity, and $100,000 in a ING Savings account. The Defferred Compensation plan grows taxed deffered and will be paid out in ten yearly installments once I leave the company in 5 years. Once paid out, it will be taxed as regular income and I plan to reinvest it in mutual funds ( If this is the best thing to do?) . Currently his means a payout of $29k (before taxes) for ten years if I do not invest in this plan in the future. We have no ther debt
Our home is worth $750K with $146K left on the 10 year 4.75% mortgage.
We have just purchased with cash 2 acres to build our retirement home in South Carolina.
We would like to simplify our life and move to South Carolina
in 5 years and change to different jobs that would gross us $60K per year versus the $250K we currently are grossing.
We estimate that to build our new home in S.C.will cost $300K which would leave* approx. $400K after the sale of our current home, paying off the mortgage, and moving expenses. We would like to build in S.C. in four years and move in 5 years.
We currently are in the 33% tax bracket. I am 45 and my wife is 51, and we are wondering what our next steps should be. I am planning on investing a
t least 30% of my gross income ($175K) in the EDC plan for the next 5 years as this will defer our income. Our only tax write-off is our mortgage interest currently so we are getting crushed in taxes (33%) as I mentioned.
The Questions I have are:
- Do we continue to invest in the Executive defferred Compensation Plan?
- Should we pay off our current Mortgage?
- Should we begin to build our retirement home with the $100K we have in the ING account and leave it sit for 2-3 years empty?
- What should we invest in if none of the above is the best strategy