Quote:
Originally Posted by midwestlaxer
dude you're loaded...do you really need a loan? If you plan this right, I would say you don't.
Good credit isn't always a good thing...it means you like to pay other people (banks) for things instead of saving up enough cash to pay for something upfront...in CASH...
sure...interest rates are cheap...but you're better off just paying cash. ALWAYS.  |
I understand the intent of your comments. As in most instances, there's always a cost-benefit analysis that must be considered.
Pulling 70K from an account that is returning an annual rate of greater than 10 percent per year just doesn't work mathematically.
For example: $70,000 auto loan at 1.5 percent over six years is an estimated $5000 in interest. (Note: Estimating a payment of $800 per month for the vehicle payment and assuming no vehicle trade-in.)
Keeping that same $70K in my 401K for that same 6 years at 10 percent per year generates over $12K in income.
Also, one must consider all sources of income during retirement and the income tax implications of this income. My accountant is still working some numbers but it's probably not a good idea to withdraw a $70K lump sum to pay for a truck in cash in addition to monthly withdraws to cover living expenses.
I'm sure there's some holes in this math but it's Saturday and I've got the smoker going in the back yard so this is some very quick numbers.
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