Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Re: Struggling to make decision
Old 01-07-2007, 11:22 AM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,324
Re: Struggling to make decision

DCA'd - dollar cost averaged. In my case the largest amount permitted under my employer's 401k plan automatically deducted from each paycheck.

heh heh heh

unclemick is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Struggling to make decision
Old 01-07-2007, 09:22 PM   #22
Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: Laurel, MD
Posts: 2,294
Re: Struggling to make decision

Originally Posted by DollahBillYall

1. I can't leverage/invest in other biz with it (loan cost is 8%, max 50K, double taxation)
2. I may be in a higher income bracket when I retire
3. I want to retire earlier than 60, as well as does my wife, or at least have the option to try to
4. have a burning desire to make more
*5. our accounts are serperated as well as our age
6. no liquidity, no liquidity
7. edited
Just my opinions...........
1. The "real" cost of a 401k loan is the "oppourtunity cost". The loan proceeds come from selling assets in the plan, so if you take a loan from a stock allocation that goes up 12%.......the "cost" for your loan is 12%. I would only take a loan from the fixed income portion of my portfolio which earns ~5%. The 8% "interest " that you "pay to yourself" has no significance, as far as I am concerned. There are mixed opinions about the double taxation issue and I am in the camp that believes it is also insignificant. A 401k loan should usually be a last resort anyway, but I also see it as a means to xfer assets out of the 401k.

2. Being in a higher tax bracket is a good thing! Least of your could always employ some alternate strategies like muni funds, etc.

3. 401k lets you withdraw with no restrictions or penalties at age 55 or better if you terminate employment. You can also do a 72t SEP Plan at any age.

4. Don't get burned.....keep exploring your options

5. Study all the fine details of your the prospectus. Find out if you can do in-service rollovers into a self-directed IRA. Seperate plans is probably better than a joint plan.

6. I saw your other post ref liquidity for real estate...........that seems to be a huge issue for you. That other post struck me as odd because real estate is the most frequently leveraged asset around. This IS retirement money. It would only make sense to use leverage for something that was a pretty sure bet. Thats why IRS won't let IRAs be used as collateral. Your best "leverage play is the 401k loan from the fixed income portion of your asset allocation.

If you are maxing out, why not cut back to whatever gives you the full company match (if you get one)........that's the bare minimum. The next level is the maximum contribution that won't drop you into a lower tax bracket. That could free up some funds for alternative investments. I think you will not find a better retirement vehicle than 401k, but thats not in any way to suggest you should only do 401k.

Good luck and stay patient!

...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline   Reply With Quote
Re: Struggling to make decision
Old 01-10-2007, 01:58 PM   #23
Recycles dryer sheets
Join Date: Dec 2002
Posts: 129
Re: Struggling to make decision

If you are throwing in money at a lower tax bracket into your 401(k).. then you might want to cut back on your contributions... One of my friends does not make much and was putting in some 15% money (taxed at 15% if she had not put in 401.. or for her 403).. I told her to STOP contributing to that and fund the ROTH or just put in a taxable account that you control...

IMO, if you are only saving 15%, it is not worth putting in a tax advantaged account when you more than likely will pay a higher rate when you retire... this is just me..
I don't think this is necessarily the case. To greatly oversimplify: the money being put in the 401k would have been taxed at one's highest tier of taxable income, but much of it comes back taxed at lower (or zero) tiers.

WRBT is offline   Reply With Quote
Re: Struggling to make decision
Old 01-14-2007, 04:15 PM   #24
Recycles dryer sheets
Arc's Avatar
Join Date: Sep 2006
Posts: 370
Re: Struggling to make decision

Originally Posted by Ed_The_Gypsy

You two must read more. A book a week would be better. (I have found that at the library, the really good books are either always out or stolen. If you have to do so, BUY THEM! If they are good, you will want to go back and re-read them from time to time anyway.)
I agree - if its a good book, I buy the audio version - with an hour commute, I've listened to "The Millionaire Mind" no less than 12 times - as well as some other goodies.
Arc is offline   Reply With Quote
Re: Struggling to make decision
Old 01-14-2007, 05:27 PM   #25
Full time employment: Posting here.
Alex's Avatar
Join Date: May 2006
Posts: 696
Re: Struggling to make decision

Originally Posted by DollahBillYall
Who the heck wants to retire at 59.5 or later?
I know quite a few people with very high net worths who continue to work well into their 80's. It is really about individual preference. Look at Warren Buffet, he's in his mid 70's and continues to work because he enjoys it. Not everyone is stuck in jobs that they don't like. Sometimes you are lucky and find work that is fulfilling in other ways outside of money.
Oh, you hate your job? Why didn't you say so? There's a support group for that. It's called EVERYBODY, and they meet at the bar.--Drew Carey
Alex is offline   Reply With Quote
Re: Struggling to make decision
Old 01-14-2007, 05:44 PM   #26
Recycles dryer sheets
Join Date: Jun 2006
Posts: 322
Re: Struggling to make decision

Plus Warren doesnt even spend his money...

You only get double taxation on the interest of the money you borrow from the 401k. I dont see it as that big a deal.

I dont get why these people want you to read all those books? Since they say just diversify into about a half dozen index funds.
Oh and you can read the books at borders and not buy. If your buying search for a coupon. You can also request books at the library....

spideyrdpd is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Undergrad Decision. PLEASE HELP (GE- CFS, JPMorgan, ABNAMRO) yamasho Young Dreamers 17 12-13-2006 10:26 AM
Another “How to make your money last” strategy REWahoo FIRE and Money 4 09-04-2006 12:44 PM
Seems that they have just made me make the move newguy88 FIRE and Money 25 08-26-2006 06:59 PM
Please help, I must make a decision this afternoon J. Tanne FIRE and Money 11 10-29-2003 07:00 AM
Please help, I must make a decision this afternoon J. Tanne FIRE and Money 1 10-29-2003 12:47 AM


All times are GMT -6. The time now is 04:11 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.