Retiring to vs. Retiring from
16 years ago
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- 16 years agolast modified: 11 years ago
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My Budget: Debt vs. Savings. vs. Retirement
Comments (5)Hi glavinsolo, When you buy your home, do you plan to cash in your MFs in order to achieve a down payment? You don't say what kind they are, but with expected rate of return of 8% I assume that they're equity-based. The expense rate of 0.5% makes me wonder about that, though, as few charge that low. If you plan to liquidate within a couple of years, if the markets go down, you may be an unhappy camper when it comes time to reclaim the investment. On the other hand, if you have the certificates issued, you can take them to a financial institution to use them as collateral for a loan ... ... which will work if your growth rate on the investment is greater than the rate you pay on your mortgage, after allowing for income tax cost and deductibility in each case. That way, you convert that investment from being a short-term one into a longer-term one, which reduces your short-term risk. Be aware, though, that a financial institution will be unwilling to loan you more than 50% (or at most 60%) of the value of the asset. But you carry some risk if you draw near the limit of what they'll allow, for if the value of the asset goes down and slips below double the value of the loan, the lender will want either some cash to reduce the amount of the loan, or some other assets to underwrite the support for the loan. And they'll want it today ... tomorrow at the latest. With regard to the cost of homes, I'm not familiar with the U.S. markets in general, let alone the ones in your area. But some calculate that the tough times in the housing markets are far from over. I think that it would be well for you to carry on some study of what house prices are doing in the area where you prefer to buy. If you buy early, and house prices continue to reduce, you'll be an unhappy camper, then, as well. Mortgage lenders get quite unhappy if the valuation of the house comes rather close to the amount of the mortgage still owing. If the value goes too low, they'll require that you sell it ... at a loss, of course ... ... or they may choose to foreclose, in which case there'd almost surely be more costs if they sell it than if you do. Which could well mean that they'd be notifying you that you owed them the difference between what you owed on the mortgage, plus costs of repossession and sale, less the amount that they sold it for. Not a pleasant scenario. But one that many who accepted those low-rate mortgages a few years ago will be facing. My feeling is that if I wanted to buy a home in the U.S. these days, I'd be keeping my money in my genes (sorry, "jeans") for a while. There are those who claim that I have some frugal chromosomes in my genes, as a matter of fact. As a matter of fact, my daughter is considering buying accomodation in Arizona, these days. Good wishes as you make your plans. ole joyful...See MoreFrom what did you retire?
Comments (3)Well, pilgrim you have stumped me. I love to take forum names apart and give the members my own pet name for them, but I don't want to call you pil and I don't want to call you grim or ill or rim. Maybe I'll call you 555. It sounds full of mystery and intrigue, not unlike 007. Remember him? 555, sounds to me like it's time to make some short term fun goals. Work is definitely not what it is ALL about, but it is good. ful, We joked about my nickname for you, but honestly, it does describe you in many other ways too. How great it is that you are full of joy and can laugh at yourself and enjoy the other "old farts." It is wonderful that you have things you want to see, do and learn. Please keep posting lots and tell us about those things. Remember, you have a new audience now. You can even repeat for my benefit. Are you doing community/charity work to make your community a happier place in which to live? I used to do scads, but now pretty much limit it to the church. jan...See MoreRetire from NJ to... Virginia? Pennsylvania ??
Comments (5)Anyone who is at all concerned with environmental quality (superfund sites, brownfields, etc) would not want northern Delaware. Dupont esssentially used the state as a dumping ground. Southern Delaware is less polluted but also has an alarming lack of good medical facilities (hospitals etc) which is often very important to people of retirement age. Southern Delaware (often called Lower Slower Delaware) is also the chicken-farm capital of the USA. If you are turnd off by the presence of mobile home parks you might not care for that in the region either. Also, someone from the tri-state may find the much slower way of life frustrating when it comes to repair people etc (this told to me by a former NYer who moved down there and ended up coming back). I currently live in the tri-state myself and know exactly what the OP is talking about, cost-of-living wise... but one has to look at the whole picture. In NJ and downstate NY we pay a lot in taxes but we also get many services that people in other parts of the country can only dream about. There's no such thing as a free (tax) lunch, anywhere. Lots and lots of research is needed before making a retirement decision. As someone reminded me recently, if you are only looking at the dollars and cents you may be very unhappy after you move. This post was edited by Helena2013 on Fri, Nov 21, 14 at 15:13...See MoreWithdrawing funds from retirement for closing costs ?
Comments (8)These opinions are regardin Tradition IRAs -- you did not indicate what type of retirement account you wish to use. 1. You will be paying a 10% early withdrawal fee PLUS paying income taxes on the amount withdrawn. The extra dollars withdrawn may even bump up your income tax bracket. 2. You have the option of taking out the withholding now or covering it at tax time. However, if you do not have enough withheld, you can be penalized at tax time. 3. The only way to take money out of retirement without incurring these tax hits is to return the money to the account with-in 60 days. You do not have to put back the full amount -- if you don't you are only taxed on the amount not put back in....See More- 16 years agolast modified: 11 years ago
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