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Location: Finally the house is done and we are in Port St. Lucie!
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Originally Posted by Paka
Well, just to wrap up the story for ya and to let you know after listening to all your ideas and great advice, we did interview 5 different companies and tonight signed with one. The GREAT news is we were able to get 18 months same as cash for the work, and THAT makes the worries and concern over taking the money from savings moot since we will just make the monthly payments each month until after the New Year when we will be able to take the balance from savings to finish paying it off, NO interest, and the only inconvenience (if you would even consider it that) is that while we will pay $2K per month until we pay it off in full lump sum, that is THAT MUCH LESS money we will have to remove and pay taxes on...and not a problem for us to cover, so WIN/WIN! Get our new "Dream" backyard oasis AND get it now AND don't have to worry about taking the $$ from tax deferred savings. HAPPY DANCE!!!!!
Phenomenal!!!! I'm so excited for you!! Enjoy the process and don't stress too much over decisions!
Congrats. Please post some pictures when it's finished. It sounds like it's going to be amazing.
We sure think so!!! VERY excited and VERY, VERY ready to DO this now that the "decision/planning/contracting side" of it is complete!!!!! Even went today and selected and purchased the hottub " spa from the same company we went with for the build....that way NO miscommunications, NO fingerpointing, NOTHING!!! IF the spa/deck have an issue, all done by the SAME company so no fingerpointing to the "other guy"...I truly believe if you do NOT build a spare bedroom, Murphy can not move in (as Dave Ramsey always says!) Will post pictures when the job is completed for sure!
GREAT advice and I will check with a CPA for sure...thanks much. No, I REALLY want to get it done and finished while we are here to oversee the project....with plans to travel extensively in Europe in 2019, I do not want it partially completed (the HOA here would have a COW and since we have to have everything approved by them, not an option at all) or to have it finished when we are not here to oversee it.....
and maybe you are correct and I am wrong at the new "tax income" info I have been researching...but from what I see in the new and improved Tax Reform starting this year, it would push us "income" based into the next tax bracket..........I was adding the amt we would take from our investments and adding to "earned income" for the year to derive that info.....
If you have Medicare A and B, and D that YOU pay for and would move up from the lowest income tax bracket by taking that money you will incur an IRRMA penalty on Medicare B and D that shows up TWO years normally from the tax filing--
So file 2018 taxes in 19 and see penalty in 20
Last edited by loves2read; 03-18-2018 at 11:17 PM..
Reason: Add
Well, just to wrap up the story for ya and to let you know after listening to all your ideas and great advice, we did interview 5 different companies and tonight signed with one. The GREAT news is we were able to get 18 months same as cash for the work, and THAT makes the worries and concern over taking the money from savings moot since we will just make the monthly payments each month until after the New Year when we will be able to take the balance from savings to finish paying it off, NO interest, and the only inconvenience (if you would even consider it that) is that while we will pay $2K per month until we pay it off in full lump sum, that is THAT MUCH LESS money we will have to remove and pay taxes on...and not a problem for us to cover, so WIN/WIN! Get our new "Dream" backyard oasis AND get it now AND don't have to worry about taking the $$ from tax deferred savings. HAPPY DANCE!!!!!
No Geoff, that will be CORRECT when we file our 2019 taxes, but since hubby retires the end of THIS year, the withdrawal would be added on to his current EARNING full salary year....that is where we jump to the higher tax bracket. You are correct in that after 1 Jan, we can take the $$ from our TSP without advancing tax bracket. That is WHY I wonder if the HELOC or HEL would be worth the short time...again, NOT looking to long term finance anything, just want to make the "best" possible tax consideration decision.....
It's already March 19th. It's only 9 months of interest to bridge you to 2019. Without knowing your income numbers, you might be able to cash in some IRA up to the top of your tax bracket and borrow the rest. Zero it out on January 2nd.
Do you have a healthy emergency fund and other money to tap into in case of an emergency?
If so, GO FOR IT!!! Life is too short. Enjoy each day sitting on your beautiful patio.
As for me, I would rather take about 5-8 cruises with my husband, but everyone is different. It is what you and your husband want to do. Keep in mind though, that the money you put into your house is just pure joy for you, not much more.
Maybe it will bring in more money when you go to sell it, but maybe it won't. It is not as if you are adding square footage to your home, that would add value. That being said, it certainly would add to the beauty of your home.
I would NOT take out any loans of any sort for this type of spending. If you can't afford to pay cash, don't do it until you have the money.
It might not have been the "smartest" route, but when we were both working civil service, we just decided to put EVEY pay raise (even if only annual "Cost of Living" or promotion in grade increase into our TSP)......with a house full of kiddos (6 total) it seemed at the time the SMARTEST way for us to save "sight unseen" and so painlessly.........perhaps there were smarter ways to go, but it did well by us at the time...and still does with hubby still working and knowing that 25% is put away.........savings, we have very little that is NOT locked into our TSP. We are "loaded" in those....but accessible money at the time was not a goal...we wanted to ensure we "lived" on what we brought in vs what was "pay yourself first" retirement goals......."savings accounts" that you could access easily just never seemed to pay enough for me to risk that "can grab at desire" attitude...I was all about SAVING it and making it painful to access to ensure it stayed there......
In my opinion you did everything right as far as funding your TSP. While I will not give advice to my apprentices and co-workers about how to distribute their money I stress the importance of contributing and trying to achieve 15% (healthy target number) by slowly reaching it through COLA's and step increases if they can't afford to jump right in.
Congrats on the project, sounds like all the stars were finally in alignment with the builder and financing!
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