- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Pay off Debts or continue to Max Roths?
Posted on 8/7/19 at 5:17 pm
Posted on 8/7/19 at 5:17 pm
Here's a summary of our outstanding Debts:
Investment Property - 5% int, 9 years remaining (currently pays for itself)
Lot - 5.45% int, 20 years (we were planning to pay this off in ~7 years)
Vehicle - 1.9% int, 5 years
Home - 4.25%, 25 years remaining.
Currently we pay the minimum payment on all 4 of these loans, but both Max Roths each year.
I ran the numbers, if we took the 12K/yr and threw them at our debt, we'd be completely debt free in 10 years, or debt free minus home in 3 years.
Paying off the first 3 frees up $1200/mo.
What do y'all feel is the wiser decision?
Investment Property - 5% int, 9 years remaining (currently pays for itself)
Lot - 5.45% int, 20 years (we were planning to pay this off in ~7 years)
Vehicle - 1.9% int, 5 years
Home - 4.25%, 25 years remaining.
Currently we pay the minimum payment on all 4 of these loans, but both Max Roths each year.
I ran the numbers, if we took the 12K/yr and threw them at our debt, we'd be completely debt free in 10 years, or debt free minus home in 3 years.
Paying off the first 3 frees up $1200/mo.
What do y'all feel is the wiser decision?
This post was edited on 8/7/19 at 5:18 pm
11
Posted on 8/7/19 at 5:28 pm to Brobocop
Depends on what you want.
You'll be better off in the long run maxing the roths most likely. Then again, having an extra 14.4k/year in cash would be pretty nice.
You'll be better off in the long run maxing the roths most likely. Then again, having an extra 14.4k/year in cash would be pretty nice.
Posted on 8/7/19 at 5:39 pm to Brobocop
What is your income prospect for the next few years?
Obviously backdoor would be available, but if you're going to exceed the phase out start or the limit in the near future, then Roth makes even more sense with those fairly manageable interest rates.
Obviously backdoor would be available, but if you're going to exceed the phase out start or the limit in the near future, then Roth makes even more sense with those fairly manageable interest rates.
Posted on 8/7/19 at 5:41 pm to castorinho
I doubt we'll exceed the threshold in 3 years.
Posted on 8/8/19 at 6:58 pm to Brobocop
Pay off debt. I’ve saved more in my 50’s than I did the rest of my life because I was debt free.
Posted on 8/8/19 at 7:40 pm to Popths
quote:
Pay off debt. I’ve saved more in my 50’s than I did the rest of my life because I was debt free.
I’m all for paying of debt but when it is at the expense of investing tax free in a bull market, I’m not so sure it’s the thing to do. The time value of money is huge and the earlier you start saving makes all the difference in the world when you are ready for retirement.
Posted on 8/8/19 at 8:01 pm to Popths
quote:time in the market matters
I’ve saved more in my 50’s than I did the rest of my life because I was debt free.
Posted on 8/8/19 at 8:17 pm to Brobocop
quote:
I doubt we'll exceed the threshold in 3 years.
but with the extra $1200 a month, you'll max out your Roth by the 4th of July
Posted on 8/8/19 at 9:10 pm to Brobocop
I think the interest rates are low enough that you should max the Roth rather than pay down the debts. Certainly don’t pay off the car loan at such a cheap rate.
Posted on 8/8/19 at 9:13 pm to Brobocop
Can the investment property be refinanced at a lower rate where you have a higher profit margin? or use the equity in the investment property to lower the rate on the lot? It isn't a bad time to use leverage. What do you plan on doing with the lot?
an extra 20 bucks a month goes a long way over time. reduce spending in a couple spots if you can. Do you have a financial Advisor? Do you have kids? lot more details would help but you should go meet with a Financial Advisor.
an extra 20 bucks a month goes a long way over time. reduce spending in a couple spots if you can. Do you have a financial Advisor? Do you have kids? lot more details would help but you should go meet with a Financial Advisor.
Posted on 8/8/19 at 9:15 pm to 632627
max the roth for sure, but on the surface it seems as if there might be a couple things to do to maximize your long term financial goals. In otherwords do you have equity in your investment home if so refinance it since it is paying for itself. Take that equity and put it to work. You could go with something conservative and fixed like preferred stock. Then take those monthly dividends to pay off non-investment property or reinvest it in something else.
This post was edited on 8/8/19 at 9:23 pm
Posted on 8/8/19 at 9:52 pm to Brobocop
quote:I ask myself the same thing quite often. Not sure who has the answer
Pay off Debts or continue to Max Roths
Posted on 8/9/19 at 6:20 am to Teddy1388
Definitely, the lot and the investment property first. Being debt free reduces so much stress in life. Sure, the Roth has a higher chance of upside, but you are taking decent guaranteed money.
Posted on 8/9/19 at 10:34 am to Newgene
Pay off the car for sure. Then I'd pay off the lower balance of the lot or rental.
Then go back to maxing the Roths and use the freed up cash flow to pay down the house and lot/rental
Then go back to maxing the Roths and use the freed up cash flow to pay down the house and lot/rental
Posted on 8/9/19 at 10:50 am to Chris4x4gill2
quote:
Pay off the car for sure.
why??? at 1.9%, it's basically free money
Posted on 8/9/19 at 12:18 pm to Brobocop
quote:
Home - 4.25%, 25 years remaining.
Got any equity in this?
Some banks offer no fee, no closing cost HELOANS under 5%
Consolidate these 2 and rerun numbers
quote:
Investment Property - 5% int, 9 years remaining (currently pays for itself)
Lot - 5.45% int, 20 years (we were planning to pay this off in ~7 years)
Posted on 8/9/19 at 1:32 pm to Popths
quote:
Pay off debt. I’ve saved more in my 50’s than I did the rest of my life because I was debt free.
ditto
Posted on 8/9/19 at 2:25 pm to Brobocop
Payoff you debt aggressively. Then once it is paid off begin saving your money.
Posted on 8/10/19 at 6:36 am to Brobocop
quote:
Home - 4.25%, 25 years remaining.
refinance this now
Posted on 8/10/19 at 8:43 am to iAmBatman
quote:
why??? at 1.9%, it's basically free money
agreed. i am normally for getting vehicles paid off and just milk your low interest house note if you have one but that rate is so low milk it also.
paid my house off back in 2012 but interest was high and didn't pay to refinance with amount left so just paid off.
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News