money for a car loan
L1: money for a car loanam 55 years old and have about $115000 in my IRA.
I just want to take out $60,000 total over 5 years. Is that OK with the 72(t)?
Thanks, Becky2009-09-22 20:42, By: Becky, IP: [22.214.171.124]
L2: money for a car loanNot really. Your maximum annual withdrawal using IRC 72(t) would be about $6,199.87 – only about 1/2 of the $12k that you are looking for. You are probably better off looking for other alternatives like a bank or home equity loan.2009-09-22 20:49, By: Gfw, IP: [126.96.36.199]
L3: money for a car loanI have a 401 with about $80K. Could I take another 72(t) withdrawal from that one to make up the rest?2009-09-22 20:56, By: Becky, IP: [188.8.131.52]
L4: money for a car loanCheck with your employer. If you have terminated service with that employer and the employer agrees, you may not need a 72t plan – merely periodic withdrawals. If you havn’t terminated employment, I didn’t believe that in-service withdrawals are allowed.
In any event, both the 401(k) and IRA are very expensive options to purchase a $60,000 car. 2009-09-22 21:02, By: Gfw, IP: [184.108.40.206]
L4: money for a car loanWith only$ 200,000 in retirement funds at age 55, you cannot afford to use those fundsto buy a $ 60,000 car. You need a financial advisor to help you budget, and to plan for you retirement.The government has run out of “bail out money”.2009-09-22 21:48, By: dlzallestaxes, IP: [220.127.116.11]
L5: money for a car loanI’ll have a pension when I retire, my house is paid for and I have no debt. My credit score is over 800. Does that make it less outrageous that I want to buy this car? I’m seriously asking your opinion.2009-09-22 22:04, By: Becky, IP: [18.104.22.168]
L6: money for a car loanWith a credit score over 800, you should have no problem merely getting a car loan or even better, since your house is paid for, a home equity loan. With home equity interest rates in the 4% to 5% before tax, that may really be your best alternative.
I have a pension, but I also wouldn’t use my IRA funds to purchase a car. Those funds are there to provide cost of living increases to my pension benefits or for real emergencies.
But I will also say that cars aren’t that important to me – when I retired last yesr, I purchased a new car at about 1/2 the price that you are considering – no retirement funds used.
2009-09-22 22:28, By: Gfw, IP: [22.214.171.124]
L7: money for a car loanPlus most millionares do not buy or lease new cars. There is a reason why they are millionares. Take care, Chris.2009-09-22 23:24, By: Chris, IP: [126.96.36.199]
L8: money for a car loanChris… 100% agreement!
I’m not in the class that you are referring to, my ‘new car’ was actually one year old and had 142 miles on it so I guess I technically bought it used – it was an end of the year clearance and it is almost that time of the year again.
Now after a year it has less than 5k miles – I live in downtown Chicago – I don’t drive very much – mostly to the harbor where I keep my sailboat.
So far retirement has been good!
2009-09-22 23:35, By: Gfw, IP: [188.8.131.52]
L9: money for a car loanGfw, I didn’t think you were in the same class as this person. Plus excellent advice on the home equity loan. It just upsets me when people use their suppose to be retirement money to buy expensive new vehicals. My wife and I have been a follower of the financial guru Dave Ramsey for 25 years. Not to plug Dave, but him and I are on the same wavelength. We never came close of losing what most people lost in the stock market. We recouped that, and we are ahead 67,000. I retired at 55, and I am one year into my 72T. Plus, I’m really enjoying my retirement. I don’t live too far from you, I’m in Grand Rapids, MI. I plan to do a little salmon fishing tomorrow. Take care, Chris.2009-09-23 00:18, By: Chris, IP: [184.108.40.206]
L7: money for a car loanI’m used to making decisions with facts. Providing only half of your facts meansyour questionmust havebeen “half asked”.
Seriously, why would you want to use non-retirement money to pay taxes 5 to 15 years earlier than you have to, lose the resulting tax-free growth, rather than using OPM (other people’s money), and getting a tax deduction for the interest on your home equity loan ?2009-09-23 01:13, By: dlzallestaxes, IP: [220.127.116.11]
L8: money for a car loanThanks everyone for your advice. The home equity loan seems like a really good way to go. I have paid cash for every other car that I’ve driven so I guess I was looking for a way to use cash that I had in retirement rather than OPM. Thanks for that suggestion! I love carsbut rarely fall in love with one, but this one is it for me – and it’s a 2007! Also, I live in the beautiful hill country of Texas and drive a lot.2009-09-23 14:15, By: Becky, IP: [18.104.22.168]