Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
a) Put the entire amount into a roth IRA
b) Use half of that money to pay down my mortgage and the other half to put in my IRA
c) put entire amount towards my house.
additional info:
my house has 27 years left to pay off and I am 33 years old. I live in California and I have a lot of equity in the house already.
I don't have a roth IRA but i have a 401k that im making monthly contributions. This Roth would be additional money.
Last edited by 49erfan916; 10-05-2017 at 11:00 PM..
Reason: wasn't done
The mortgage. Because I am a freak about debt. I don't want any. None. I especially want my shelter secured since we can never know what might hit us........
The mortgage. Because I am a freak about debt. I don't want any. None. I especially want my shelter secured since we can never know what might hit us........
I was thinking of the same thing. If i put the money in a roth, i could lose money. However, if i put my money towards my home, then I am guaranteeing myself that I am paying off an appreciable asset.
been a decade now and none of the homes in pa where we had a 2nd home appreciated . in fact the one we sold in 2012 is worth 65k less than we sold it for .
the area's big winter attraction went bankrupt ,the ski area , talking the entire area with it . but the once popular pocono's have been dying for years like the catskills in ny did .
there are no guarantees your home will appreciate . you may get to live there but even then then no guarantees you can .
look at the tristate area where when we bught homes in the 1970's they were 30-35k . today that paid off mortgage amount won't cover a utility bill . taxes are 10-18k a year on that once 30-35k home . so even then there is no guarantee you can afford to live in it decades down the road as all the other expenses grow many times over and eclipse that mortgage by a lot . .
Put it in a Roth IRA (for the reasons already mentioned). At your age, you need money in investments more than a paid-off house (which you would not be able to afford to keep anyway if you became unemployed for any significant time). And there's no guarantee your home will appreciate.
I would want to know -
What is your marginal tax rate?
Are you paying PMI?
Are you already contributing the max 18K to your 401k?
Do you have any debts besides the mortgage?
I would go with the Roth too assuming you have no other debt and a healthy emergency fund stashed away (if not, you might want to consider that as well).
This is just my opinion, but I've always contended there is no reason to tie up money in a home, paying it off, unless you know you are going to stay there forever. Plus, homes can depreciate/lose money too, so there is no guarantee.
In the end, it comes down to personal choice and your goals. But you are a smart guy, I know you will make the right choice. Congrats on the extra money!
If your goal is to get the best return on your dollar, then Roth IRA 100%.
Quote:
Originally Posted by 49erfan916
I was thinking of the same thing. If i put the money in a roth, i could lose money. However, if i put my money towards my home, then I am guaranteeing myself that I am paying off an appreciable asset.
You have as much guarantee that your house will appreciate as the stock market has, so you're just as likely to lose it. If the crash happens, the house value will go down as well. Meanwhile, stock market will give you a better return unless you're in some extremely favorable housing market, which I don't think exist in the US at the moment (that would beat the stock market return in current economy).
a) Put the entire amount into a roth IRA
b) Use half of that money to pay down my mortgage and the other half to put in my IRA
c) put entire amount towards my house.
additional info:
my house has 27 years left to pay off and I am 33 years old. I live in California and I have a lot of equity in the house already.
I don't have a roth IRA but i have a 401k that im making monthly contributions. This Roth would be additional money.
Put it all into a Roth. Since the max is $5500, use the $500 in December to put extra toward the house. Put it in a fund like Vanguard Wellington. It's 65% stocks and 35% bond, so it shouldn't get hit too bad if the market crashes. If you're a total scaredy cat, put it in Vanguard Wellesley Income. It's more bond heavy. Lower returns, but lost less than 10% in 2008's market crash.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
