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Post by wesb81219 on Apr 3, 2017 18:45:47 GMT -5
No matter how you look at it your eventually getting taxed on everything. Do you not buy anything from a store because your paying sales tax using money you've paid income tax on ? you will also eventually pay tax on a 401k so it's only untaxed money for so long. Point is your getting taxed over and over so I'm not concerned about when it happens.
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Post by whitetaildave24 on Apr 3, 2017 18:58:46 GMT -5
And like I mentioned before you can't find a 2.3% interest rate at a lender like I am paying now. To each their own I suppose. One way or the other it all works out in the end.
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Post by wesb81219 on Apr 3, 2017 19:02:29 GMT -5
Ultimately it's about what makes each individual happy
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Post by lawrencecountyhunter on Apr 3, 2017 19:08:36 GMT -5
And like I mentioned before you can't find a 2.3% interest rate at a lender like I am paying now. To each their own I suppose. One way or the other it all works out in the end. Does that 2.3% go to yourself or your account administrator? I know different places and different types of accounts have different rules.
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Post by greghopper on Apr 3, 2017 20:01:07 GMT -5
Yes, it will cost money.. I still don't see a disadvantage over saving it somewhere else though. The 5% interest goes into your account to somewhat mitigate your lost interest gains, so I don't see that $500 as a loss. If I save 10k in a savings account or similar over the course of a couple years to use as a down payment: I pay that same $2500 in income taxes before it goes in the account. I lose opportunity cost every year it's not invested. Not just the one year I borrow it out. I lose purchasing power the entire time I'm saving, since inflation is much higher than the interest rate of the savings account. Maybe I'm missing something? I still have several years to pay on my house before purchasing land, but would like to have a plan together for when that day comes. That how I always seen it also....
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Post by whitetaildave24 on Apr 4, 2017 4:05:57 GMT -5
And like I mentioned before you can't find a 2.3% interest rate at a lender like I am paying now. To each their own I suppose. One way or the other it all works out in the end. Does that 2.3% go to yourself or your account administrator? I know different places and different types of accounts have different rules. It all goes back to me. I administer my own account.
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Post by davers on Apr 4, 2017 4:26:36 GMT -5
Borrowing against ones' 401K or IRA, for purchasing hunting property, is a VERY BAD IDEA!! Explain how this is a BAD Idea....Do tell BTW....your basically paying your self back! See jjas's post. I have a Friend living in Colorado in which he and his wife borrowed money from their 401Ks in order to purchase some land and build a home. Long story short; they ended-up losing their home and had to move to an apartment. He & his Wife are both 66 years old and are unable to retire. Like I said and tell everyone who desire to own some land: SAVE up your money, at least enough to make a down payment or just purchase the land "right out" having to make NO payments to any lending institution. Main point be sure you can make payments if you do borrow money to purchase land/home.
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Post by davers on Apr 4, 2017 4:34:20 GMT -5
A little barnyard math on borrowing from your 401K, let's use $10,000 for one year. You will have to pay interest on this amount, at 5%, that equals $500 You are taking dollars that were untaxed, now have to use taxed dollars to pay it back. If you're in the 25% bracket, that's $2,500 Most 401K invested did very well this year, 15% gains were pretty common, that's $1,500 gains missed out on. So $4,500 to use $10,000 for one year. Extend the duration or increase the amounts and it gets progressively worse. Save money that you want to spend on things someplace other than a 401K, and leave your retirement money untouched and working until retirement. GOOD POST!
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Post by greghopper on Apr 4, 2017 6:29:56 GMT -5
Explain how this is a BAD Idea....Do tell BTW....your basically paying your self back! Main point be sure you can make payments if you do borrow money to purchase land/home. Isn't that how ALL loans are supposed to WORK....
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Post by greghopper on Apr 4, 2017 6:31:36 GMT -5
Does that 2.3% go to yourself or your account administrator? I know different places and different types of accounts have different rules. It all goes back to me. I administer my own account. That's the Beauty of a self loan...IMO
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Post by featherduster on Apr 4, 2017 6:42:34 GMT -5
As this topic was being discussed I was busy buying another parcel of ground, it is 4.25 acres that my property surrounded on two sides with county roads on the other two sides. The owner of the property was the Federal Government and on that parcel of land was a tower and a building which were removed to E.P.A. standards just 2 months ago. The land is high and dry ground that is wooded except for where the building was located, my existing property is a WRP wetlands and a large pond that are in protected wildlife habitat. My reason for purchasing the land was to prevent anyone from becoming my neighbor and to increase the value of my existing property also the deer and turkey like to hang out in this woods. The government required a appraisal done by a MAI certified appraiser that I had to pay for (not cheap) and you don't get this money back, PERIOD!
I sent the government a check and they in turn sent me a quick deed for this parcel of land, since I border the land on 2 sides and the other sides are located along a county road I did not need to have the parcel surveyed I just had to make sure that the deed measurements were the same as those on file with the courthouse. I have several times in my lifetime needed to have a parcel of ground surveyed and it's not cheap so keep that in mind,check with the courthouse find out what your estimated taxes will be and don't think that you will just enroll land in a WRP or a CRP program and get money in return because it is getting tougher and tougher to get a parcel of ground qualified.
You still might be able to enroll it in the Indiana protected wildlife program and save on taxes but do some long range thinking before you make any decisions regarding these programs because if could cost you money in the long run if you decide you want to do something different with your land later in life.
I did a lot of the things young men do, I have built and owned beautiful cars and collected a few toys but none of these things have brought me more satisfaction than owning clean and clear my own hunting/fishing property. My wife and I built our home on this property we have enjoyed every sunrise and sunset, every fish from our ponds every piece of wild game we eat and a few other hidden treasures that we find on a yearly basis.
You will never go wrong by buying land and don't let the prices you see or hear about effect your judgement when it comes to shopping for that right piece of ground. When considering a piece of ground the first thing I would want out of the property is a place to build my home. Second would be the hunting and fishing availability and last but not least the neighbors.
GOOD LUCK TO ALL!
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Post by davers on Apr 4, 2017 7:37:31 GMT -5
Main point be sure you can make payments if you do borrow money to purchase land/home. Isn't that how ALL loans are supposed to WORK.... Yes, you're correct. Just be sure you have the money to repay the loan.
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Post by greghopper on Apr 4, 2017 7:45:45 GMT -5
Exactly.... if plan on defaulting a loan a 401k loan is not the loan you should do that with!
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Post by featherduster on Apr 4, 2017 7:48:06 GMT -5
Cash is KING
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Post by realhunter on Apr 4, 2017 9:42:22 GMT -5
[/quote]Explain how this is a BAD Idea....Do tell
BTW....your basically paying your self back![/quote]
You sacrifice the earnings that might have accrued on the borrowed money,had it remained in your retirement account.
Although you pay the loan amount back to your retirement account with interest, the amount of interest paid may be less than what you might have earned if the money had remained in your retirement account.
Also, as already mentioned - you are paying off the loan with after tax dollars...
So your 2.35% loan in not really 2.35%
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Post by Woody Williams on Apr 4, 2017 10:14:28 GMT -5
Explain how this is a BAD Idea....Do tell BTW....your basically paying your self back! See jjas's post. I have a Friend living in Colorado in which he and his wife borrowed money from their 401Ks in order to purchase some land and build a home. Long story short; they ended-up losing their home and had to move to an apartment. He & his Wife are both 66 years old and are unable to retire. Like I said and tell everyone who desire to own some land: SAVE up your money, at least enough to make a down payment or just purchase the land "right out" having to make NO payments to any lending institution. Main point be sure you can make payments if you do borrow money to purchase land/home.
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Post by whitetaildave24 on Apr 4, 2017 10:22:01 GMT -5
Explain how this is a BAD Idea....Do tell BTW....your basically paying your self back![/quote] You sacrifice the earnings that might have accrued on the borrowed money,had it remained in your retirement account. Although you pay the loan amount back to your retirement account with interest, the amount of interest paid may be less than what you might have earned if the money had remained in your retirement account. Also, as already mentioned - you are paying off the loan with after tax dollars... So your 2.35% loan in not really 2.35%[/quote] Or maybe the market fails and you don't lose as much because there's not as much in there. Two sides of the coin.
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Post by Woody Williams on Apr 4, 2017 10:44:00 GMT -5
401K is funny money until you take it out. It can go up and down.. I've seen it MANY times. That is why I don't get too excited about the ups and downs...
Separate issue......
I know one thing... When I turned 70 I had to take my money out of the ALCOA "savings plan" as they did not like to mess with the government required yearly withdrawals. I rolled it over with Ameriprise Financial and wish I had rolled it over way before that. I was very limited on what I could invest in with the ALCOA plan. Ameriprise has done very well for me.
Not sure if a present employee could withdraw from their 401k, roll it over and have someone else manage it for them.If they can that is what I would do..
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Post by davers on Apr 4, 2017 10:52:52 GMT -5
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Post by Woody Williams on Apr 4, 2017 11:06:05 GMT -5
I've found over the years that most people who give feedback on websites are the ones that are disgruntled. Again, they have done very well for me.. I would suggest to anyone who has a 401K at work to see if they can take it out, roll it over to a real financial advisor
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