DriveInDriѵeOut
Inordinately Right
So who can tell me what the return on their 401k was in 2015?
401k for dummies?
- Thread starter MC0493
- Start date
Not enough
DriveInDriѵeOut
Inordinately Right
I'm just curious because I'm focused on paying off the mortgage (4.125%) over investing. I know it may not be the best decision but the idea of being debt free is really appealing. I don't have a lot of faith in the market at this point.
How many More years?
DriveInDriѵeOut
Inordinately Right
29 lol.
8 if I keep up the payments I've been making for the past year.
A 15 might be worth your while.
Yes they pay
1989
Well-Known Member
All depends on where your money is.
DriveInDriѵeOut
Inordinately Right
You mean a refinance?
Thing is, I'm a TCD, so I've always got it in the back of my head that my income isn't guaranteed (even though I work everyday year round). So I like the lower payment requirement just in case something changes. I've got a year of mortgage payments in savings, and at this point, I've got more money than I know what to do with. No kids, no car payments, no credit card debt, it's all gravy at this point.
Put some more money down and refinance.
olroadbeech
Happy Verified UPSer
you would have to pay taxes and penalties if you took that money from the 401k to pay off your mortgage. that amounts to up to a 40% hit.
DriveInDriѵeOut
Inordinately Right
The money is in a traditional savings account not a 401k, and it's not money I'm willing to use, it's an emergency fund. I'm a pessimist, I always expect the worst, and I aim to be prepared for it.
olroadbeech
Happy Verified UPSer
sorry bout that. i assumed you were speaking of using your 401k from post #61.
we made extra principal payments on our mortgage for quite awhile, put the tax refunds towards it also and paid it off in 17 years instead of 30 and saved over 125k in interest payments. saving 125k is like earning 125k so that's a good investment.
also had cash in savings covering 12 months for bills in case of an emergency. started that years and years ago with just a 3 month emergency fund and worked up to 12. never touched it for anything. not pessimistic just pragmatic. there is a difference.
UpstateNYUPSer(Ret)
Well-Known Member
-2.18%
UpstateNYUPSer(Ret)
Well-Known Member
I am doing the same. I have 2 years left and my goal is to have the mortgage paid off before I retire.
PiedmontSteward
RTW-4-Less
The general rule of thumb that I've followed/will follow with extra cash (assuming all regular bills are paid/current) is the following in this order:
Have a 1 month emergency fund
Contribute to 401k up to matched contributions (doesn't apply to us at UPS as non-management)
Pay off all high interest debt (primarily credit cards, anything over 7.0% APR applies)
Contribute a certain percentage to your 401k (this varies for me, but I've been using mine as a "tax shelter" the last few years to reduce my tax burden when I work side jobs as a 1099 contractor -- typically I contribute up to 13-14% when I have a side job and it drops down to 7.0% when I'm between gigs)
Have a 3 month emergency fund (this is where I'm at right now)
With loans that allow you to "pay ahead", get 3 months ahead if possible (I do this with my student loans in case I get canned so I don't have to worry about getting nailed with late fees/garnishment in a worst case scenario)
Have a 6 month emergency fund
Pay off low-interest loans (this would apply to my car loan, which is under 2.5% and my home loan which is under 3.0% -- probably not going to be at this point for a few more years)
Might as well build your 401k now while you're young so it can be established by the time you're a regular FT driver but otherwise it sounds like you're the man with the plan.
olroadbeech
Happy Verified UPSer
we had a 5 year plan before retirement.
pay off house 18-24 months before so we could stash cash.....hence the 12 month plus emergency fund.
pay off all debt ( never kept any debt except mortgage anyway )
buy a late model SUV and repair other cars until nearly perfect
go get complete dental and medical checkups just in case of major work needed to be done.
all home improvements done before retirement including new kitchen appliances, washer/dryer etc.
i can't think of anything else. it worked for us. been out a year and everything was covered.
pay off house 18-24 months before so we could stash cash.....hence the 12 month plus emergency fund.
pay off all debt ( never kept any debt except mortgage anyway )
buy a late model SUV and repair other cars until nearly perfect
go get complete dental and medical checkups just in case of major work needed to be done.
all home improvements done before retirement including new kitchen appliances, washer/dryer etc.
i can't think of anything else. it worked for us. been out a year and everything was covered.
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