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re: Would you dip into your IRA to purchase your dream home?
Posted on 7/1/21 at 3:36 pm to Crescent Connection
Posted on 7/1/21 at 3:36 pm to Crescent Connection
Far too many people put value into their "dream home".
I have too many friends living in $500,000 houses yet balk at going to a nice restaurant with friends because it's too expensive.
There is nothing more important for you or your family than putting your money to use so it makes you more money.
Your ego purchases (house, car, boats, etc) can wait until you are wealthy.
I have too many friends living in $500,000 houses yet balk at going to a nice restaurant with friends because it's too expensive.
There is nothing more important for you or your family than putting your money to use so it makes you more money.
Your ego purchases (house, car, boats, etc) can wait until you are wealthy.
1
Posted on 7/1/21 at 3:48 pm to Crescent Connection
How many posters actually take the advice given?
I suspect many do not.
Case in point, asking about buying a house with girlfriend.
I suspect many do not.
Case in point, asking about buying a house with girlfriend.
Posted on 7/1/21 at 3:53 pm to I Love Bama
quote:
There is nothing more important for you or your family than putting your money to use so it makes you more money.
While true,
quote:
I have too many friends living in $500,000 houses yet balk at going to a nice restaurant with friends because it's too expensive.
is a very contradictory statement to above.
Posted on 7/1/21 at 3:55 pm to ItzMe1972
Your be house poor. A 1250 mortgage I assume is for 170-200k mortgage and you 3k left for food and entertainment and utilities for a family of 6. Factor in cell phones, internet/cable, gas, electrify, water, garbage, car insurance and other bills your probably in 1500ish range for food and entertainment. Then take the mortgage of a 500k house at say 3500 and I don’t see how you afford it
Posted on 7/1/21 at 4:37 pm to Crescent Connection
Never. The most expensive money you’ll ever spend except your HSA money. Buy something you can afford if you néed more room.
Posted on 7/1/21 at 5:08 pm to dovehunter
Honestly a little confused how you can't roll your current equity/house into a 500k house pretty easily and maintain pretty close to the current payment.
7500 net between both you and wife?
Do either of your have reasonable prospects to move higher? Or are you pretty topped out?
500k house isn't shite these days, no offense. Point being with rates at 3%, you shouldn't have to dip into retirment if your currnet house has appreciated.
7500 net between both you and wife?
Do either of your have reasonable prospects to move higher? Or are you pretty topped out?
500k house isn't shite these days, no offense. Point being with rates at 3%, you shouldn't have to dip into retirment if your currnet house has appreciated.
Posted on 7/1/21 at 7:32 pm to STLhog
quote:
500k house isn't shite these days, no offense.
It’s a more expensive home than 80+% of the people in this country have.
Only on the Money Talk is it mediocre.
Posted on 7/1/21 at 8:08 pm to STLhog
quote:
500k house isn't shite these days
Not sure when $500k houses, $50k vehicles, $50k+ weddings, $10k+ vacations became normal, even dull for some.
Whatever happened to Spam sandwiches? We still have those?
Posted on 7/1/21 at 8:53 pm to slackster
Ive read the mean is around 300 and average is 400.
There are a ton of listings failing appraisals.
I wonder about the price sustainability if wages don't rise up. In the higher property tax areas they are hammering people.
There are a ton of listings failing appraisals.
I wonder about the price sustainability if wages don't rise up. In the higher property tax areas they are hammering people.
Posted on 7/1/21 at 9:12 pm to molsusports
quote:
There are some horror stories out there. Even a fairly smooth new construction will often have cost and time overruns.
I think this is a big consideration. Is this your first time dealing with home construction? Given the house is already a stretch budget wise I would worry about getting yourself into a project with an unknown ceiling.
That said, I actually don’t hate the idea of taking from retirement now to acquire the house you will retire in.
You have 4 kids in 1600 square feet. You will have to move eventually and frankly need to for your family. You are also 36. If you move into your forever home now you could position yourself to be mortgage free as you enter retirement. I think having a paid off house when you retire a very important goal to meet.
Posted on 7/1/21 at 9:14 pm to Crescent Connection
No!
$260000 in qualified retirement plans will grow to
$1,900,000 at 6% interest with a $5000 annual contribution in 30 years!
$260000 in qualified retirement plans will grow to
$1,900,000 at 6% interest with a $5000 annual contribution in 30 years!
Posted on 7/1/21 at 9:29 pm to Crescent Connection
Don't listen to these people. You have a better feel for the pulse of your financial situation.
One second they say never pay off a loan that has an interest rate less than what you can make in the market and the next second the first response is pay off your vehicles and it gets upvoted.
Your QOL and happy wife will more than make up for the difference.
One second they say never pay off a loan that has an interest rate less than what you can make in the market and the next second the first response is pay off your vehicles and it gets upvoted.
Your QOL and happy wife will more than make up for the difference.
Posted on 7/1/21 at 9:51 pm to Crescent Connection
I'm in my 50s.
I never took a dime out of any 401k/ IRA at any point.
I'm finally in a good place with those accounts that I can realistically consider early retirement.
Contrarily, I know several people my age that did dip into their retirement funds to pay off whatever, and they are no where near where I am. And I haven't been aggressive on investments, primarily index type mutual funds all along.
Just think about the long term of withdrawing from a retirement account.
Withdraw $50k today, that's worth a half milion in 30 years at 8% annual growth.
I never took a dime out of any 401k/ IRA at any point.
I'm finally in a good place with those accounts that I can realistically consider early retirement.
Contrarily, I know several people my age that did dip into their retirement funds to pay off whatever, and they are no where near where I am. And I haven't been aggressive on investments, primarily index type mutual funds all along.
Just think about the long term of withdrawing from a retirement account.
Withdraw $50k today, that's worth a half milion in 30 years at 8% annual growth.
This post was edited on 7/1/21 at 9:52 pm
Posted on 7/1/21 at 9:54 pm to GrizzlyAlloy
I will agree. 6 people in a 1600 Sq ft house sounds miserable. I'm not saying it's not doable, but it sounds awful. Everyone here loves the idea of the huge nest egg at retirement. That's great, but if you gave me the option of an extra 10k/year in retirement or a house that suited my family's "needs" for childhood, give me the house.. Hell I'd work an extra 2 to 3 years to provide them and myself a more enjoyable experience.
I agree I think there are other ways to get this done, and I think the quote is likely too high.
With regards to building costs, materials will definitely get cheaper, but that doesn't necessarily mean you will see a proportional decrease in housing cost. The new appraisal floors are being set with this prolonged housing boom. There is no asterisk next to them until the market itself corrects. Good luck timing that. It could be until your oldest is in high school, or it could be tomorrow. I bought at the top of the market in 2014. I sold at the top of the market in 2019, and that same house is worth $50k+ more today. I was told I was dumb for buying and lucky in selling. No way was either market sustainable.
I agree I think there are other ways to get this done, and I think the quote is likely too high.
With regards to building costs, materials will definitely get cheaper, but that doesn't necessarily mean you will see a proportional decrease in housing cost. The new appraisal floors are being set with this prolonged housing boom. There is no asterisk next to them until the market itself corrects. Good luck timing that. It could be until your oldest is in high school, or it could be tomorrow. I bought at the top of the market in 2014. I sold at the top of the market in 2019, and that same house is worth $50k+ more today. I was told I was dumb for buying and lucky in selling. No way was either market sustainable.
Posted on 7/1/21 at 9:58 pm to GeauxTigers777
I will also add the retiring 5 years early sounds great until you get a serious medical condition. Then you realize you now have a shortened life span,and you have sacrificed for the grand finale that will never happened. I've seen it too many times to stake my hopes on accomplishing my goals in retirement.. With that being said, I still save for the ability to retire early. I just make sure that I don't value future life experiences more than current life opportunities.
This post was edited on 7/1/21 at 10:00 pm
Posted on 7/1/21 at 10:29 pm to GrizzlyAlloy
quote:
Your QOL and happy wife will more than make up for the difference.
The QOL where $550 in higher monthly expenses puts you in a bind isn’t all that great. The house is too much without a better budget. His expenses are only going to get higher too.
Posted on 7/1/21 at 10:33 pm to GeauxTigers777
I agree with everyone else here that it’s a bad idea but more importantly I would look at eventually moving to an area where you are able to send your kids to public school. Because 4 kids in private school is going to make your budget extremely difficult without a significant increase in income.
Posted on 7/1/21 at 10:45 pm to GeauxTigers777
How do you value intangibles of wealth?
Control of your own time
Having options
Able to say no to your boss.
Agree that balance (today and tomorrow) is generally a good approach, to financial planning and life in general.
My experience is those that live by “risk of shortened life” sometimes use it as cloak of “I’m living for today”.
Not you. In general.
If your life poses average risks to life span, curious how you value said intangibles.
Control of your own time
Having options
Able to say no to your boss.
Agree that balance (today and tomorrow) is generally a good approach, to financial planning and life in general.
My experience is those that live by “risk of shortened life” sometimes use it as cloak of “I’m living for today”.
Not you. In general.
If your life poses average risks to life span, curious how you value said intangibles.
Posted on 7/1/21 at 11:04 pm to Turf Taint
Very valid points, and I'm likely a bit jaded with having a world view of having a loved one with a terminal, debilitating disease.
I have close friends that resemble this board and live for FIRE and neglect simple opportunities. They appear more stressed over the thought of being able to achieve financial independence than the financial dependence of their situation is actually imparting. There is definitely a happy medium that this board seems to commonly neglect.
The intangibles of wealth are exceedingly difficult to explain, and I do not attempt to refute them. It is definitely a huge relief to have options, not be a slave to your job, or your current financial situation.
At the same time, I will reiterate that living in a 1600 Sq ft house with 4 children also sounds miserable. That has its own intangible stress that is not being addressed by most recommendations.
I have close friends that resemble this board and live for FIRE and neglect simple opportunities. They appear more stressed over the thought of being able to achieve financial independence than the financial dependence of their situation is actually imparting. There is definitely a happy medium that this board seems to commonly neglect.
The intangibles of wealth are exceedingly difficult to explain, and I do not attempt to refute them. It is definitely a huge relief to have options, not be a slave to your job, or your current financial situation.
At the same time, I will reiterate that living in a 1600 Sq ft house with 4 children also sounds miserable. That has its own intangible stress that is not being addressed by most recommendations.
Posted on 7/1/21 at 11:14 pm to Crescent Connection
A vasectomy would be cheaper!
You can always get it reversed after you buy the house.
You can always get it reversed after you buy the house.
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