PRU 401K Deduction?...

[DriveInDriveOut]

Are you in the plan now?

No.
3.5 more years and I'll have paid off my 30 year mortgage in under 5 years, then I'll re-evaluate my retirement strategy. I've got a Roth started but I'm not actively investing in it, I don't have a lot of faith in Wall Street at this point. Being debt free might make me a little braver when it comes to investing.

 

[upschuck]

No.
3.5 more years and I'll have paid off my 30 year mortgage in under 5 years, then I'll re-evaluate my retirement strategy. I've got a Roth started but I'm not actively investing in it, I don't have a lot of faith in Wall Street at this point. Being debt free might make me a little braver when it comes to investing.

Put the amount of your house payment in your 401k.

 

[IVE GOTTA PACKAGE 4U]

No.
3.5 more years and I'll have paid off my 30 year mortgage in under 5 years, then I'll re-evaluate my retirement strategy. I've got a Roth started but I'm not actively investing in it, I don't have a lot of faith in Wall Street at this point. Being debt free might make me a little braver when it comes to investing.

I strongly to encourage you to put something in the 401k. Even if it's only 1%. Will $15 bucks a week kill your budget?

 

[DriveInDriveOut]

Put the amount of your house payment in your 401k.

I thought the limit was like 18k?
I'd exceed the limit by about 25k.

 

[Jones]

I thought the limit was like 18k?
I'd exceed the limit by about 25k.

Put the rest in your roth IRA.

 

[upschuck]

I thought the limit was like 18k?
I'd exceed the limit by about 25k.

Then put some in Roth IRA, the rest have fun with.

 

[upschuck]

Put the rest in your roth IRA.

That limit is 6k right now, I think

 

[Jones]

That limit is 6k right now, I think

Running out of tax shelters for all your extra money is a nice problem to have....

 

[IVE GOTTA PACKAGE 4U]

@DriveInDriveOut
You are forgetting one very important thing.

You are giving away the time of compounding.


Please read this

Here's The Difference Between Someone Who Starts Saving At 25 Vs. Someone Who Starts At 35

 

[DriveInDriveOut]

@DriveInDriveOut
You are forgetting one very important thing.

You are giving away the time of compounding.


Please read this

Here's The Difference Between Someone Who Starts Saving At 25 Vs. Someone Who Starts At 35

I guess I'm just not convcinced by this strategy. I feel like paying extra on my mortgage gets me a guaranteed 4.25% return on my money. What kind of returns am I going to get with the 401k......
Saving money in one place while paying interest on a loan in another isn't really a game I want to play.

 

[IVE GOTTA PACKAGE 4U]

I guess I'm just not convcinced by this strategy. I feel like paying extra on my mortgage gets me a guaranteed 4.25% return on my money. What kind of returns am I going to get with the 401k......

Can't you do 1%? And next raise you get make it 2%?

 

[DriveInDriveOut]

Can't you do 1%? And next raise you get make it 2%?

Ya I could, I could easily max out 401k and Roth.
I pay an extra $3500 in principal on my mortgage every month.

 

[IVE GOTTA PACKAGE 4U]

Ya I could, I could easily max out 401k and Roth.
I pay an extra $3500 in principal on my mortgage every month.

Not asking you to Max it out. Just put a little something away .
I understand how you feel. I busted my ass to pay my house off early but I always out something away in my retirement.

I will tell you this it's nice to look at my 401k and see a couple of years worth of paychecks in it.

You can never make up the time you are losing by not investing.

Please trust me on this.

 

[Jones]

Ya I could, I could easily max out 401k and Roth.
I pay an extra $3500 in principal on my mortgage every month.

There's nothing inherently wrong with that because as you said paying down interest bearing debt is a guaranteed return on your investment. And once you're debt free there are certainly other options, you could continue to buy more properties and turn them into rental units for instance (I know drivers who do this). But if you are going to invest that extra money then the 401k is clearly one of the best options both for the low fees and because it functions as a tax shelter.

 

[DriveInDriveOut]

Not asking you to Max it out. Just put a little something away .
I understand how you feel. I busted my ass to pay my house off early but I always out something away in my retirement.

I will tell you this it's nice to look at my 401k and see a couple of years worth of paychecks in it.

You can never make up the time you are losing by not investing.

Please trust me on this.

But let's say my house was paid off..... and I could take out an equity loan at 4.25 points and invest that money, should I do it? Seems kind of crazy. So why would I invest money now when I'm paying 4.25 on the mortgage.....

I dunno man I went round and round about this after I bought this house, and just decided the financial security of being debt free was what I wanted to do. I'm just a dumb truck driver.

 

[IVE GOTTA PACKAGE 4U]

But let's say my house was paid off..... and I could take out an equity loan at 4.25 points and invest that money, should I do it? Seems kind of crazy. So why would I invest money now when I'm paying 4.25 on the mortgage.....

I dunno man I went round and round about this after I bought this house, and just decided the financial security of being debt free was what I wanted to do. I'm just a dumb truck driver.

I understand about wanting to be debt free. It's a fantastic feeling


You still need to out some away now

 

[DriveInDriveOut]

I understand about wanting to be debt free. It's a fantastic feeling


You still need to out some away now

You trying to wear me down IVE!.... I'm a stubborn bastard.

 

[IVE GOTTA PACKAGE 4U]

You trying to wear me down IVE!.... I'm a stubborn bastard.

I wrote the book on being a stubborn SOB

Now get you ass on the computer and enroll in the 401k
Before it get to this.

 

[DriveInDriveOut]

I wrote the book on being a stubborn SOB

Now get you ass on the computer and enroll in the 401k
Before it get to this.View attachment 141168

Well I'll admit you got me looking into it.
My wife and I are both covered by a pension plan and our modified AGI is over 118k, so apparently there's not tax deduction for traditional IRA or Roth. I think the 401k is still fair game but I'm confused by this HCE stuff....

 

[IVE GOTTA PACKAGE 4U]

Well I'll admit you got me looking into it.
My wife and I are both covered by a pension plan and our modified AGI is over 118k, so apparently there's not tax deduction for traditional IRA or Roth. I think the 401k is still fair game but I'm confused by this HCE stuff....

That wouldn't apply to you. Unless you are making over 100+k by yourself and maxing out your 401k