Thinking about cashing in my IRA to buy a '67.

[Michael J.]

Re: Thinking about cashing in my IRA to buy a '67.

but I do have a MBA in finance from UCLA,
Duke

OH! All I can say is "Fight On"!!

[Kenneth H.]

Re: Thinking about cashing in my IRA to buy a '67.

I didn't take money out of my 403b 18 months ago when I purchased my LT1, but what I did was borrow the money (via a home equity loan for the tax advantage) to finance the purchase, figured the monthly cost of the loan, and then reduced my future monthly contributions to the 403b by that amount until the loan is paid off. Don't know if it was a good idea since the market has climbed steadily for the last year, but I have my 'vette, it seems to be holding its value, and I wasn't assessed a penalty for a 403b early withdraw.

[Clem Z.]

Re: Thinking about cashing in my IRA to buy a '67.

I didn't take money out of my 403b 18 months ago when I purchased my LT1, but what I did was borrow the money (via a home equity loan for the tax advantage) to finance the purchase, figured the monthly cost of the loan, and then reduced my future monthly contributions to the 403b by that amount until the loan is paid off. Don't know if it was a good idea since the market has climbed steadily for the last year, but I have my 'vette, it seems to be holding its value, and I wasn't assessed a penalty for a 403b early withdraw.

the trouble with that if you loose your job you could also loose house unless you can sell the corvette. i would never finance anything for more $$$ than i know i could dump it for it things get bad. i would never put my house at risk for any car not even a corvette.

[Duke W.]

Re: Thinking about cashing in my IRA to buy a '67.

You and I (and Clark Howard) are "old school". We would never recommend taking out a second on the house to buy a car, but it's amazing how many people did in the last decade.

Whether Wall Street, Main Street, or your own block, an unprecedented number of banks and households threw caution out the window and engaged in risky transactions, and we are now all paying the price including those of us who were prudent.

Duke

[Duke W.]

Re: Thinking about cashing in my IRA to buy a '67.

OH! All I can say is "Fight On"!!

Given the most recent football and basketball seasons, the Bruins need to do more than fight. They need help!

Duke

[Ridge K.]

Re: Thinking about cashing in my IRA to buy a '67.

I did it, and have ZERO regrets.
But I admit I was in a unique situation with other retirement income secure, as a retired career firefighter. And by the way, my tax advisor says that you pay the 10% penalty if the 401K funds are withdrawn before age 59 and 1/2, not age 55 (I'm not 100% sure he's right) . (this has now been confirmed)

I cashed mine out in early 2006 and used the funds to purchase my barn-find '67 big block convertible. At the time, my 401K wasn't performing as well as other investments I had, so it was the natural choice to liquidate.
Not too long after I cashed it out, was one of the large stock market drops. By comparing to my friends who kept their funds, I would have lost approximately half of the value, had I kept the fund.

Corvette values are strictly a matter of opinion, but in my humble opinion, my '67 is worth essentially the same as I paid for it in 2006, plus my restorative costs. I'll take that deal any day. I have loved owning this car, and have yet to drive it. My "bucket list" includes as least one drive the full length of Pacific Coast Highway, both directions.... with the top down.

One final point. I retired in 2005 at age 50. Of my closest 10 friends at that time, I have now lost five of them due to their deaths. The ages ranged from early 50s up to 62 years old.
That pretty much explains what I think about concerns over paying the taxes, and/or penalties in order to purchase a great pleasure in life.

You only get one life........one go around...

Some will be looking over their financial portfolios, the very day they pass on.
Some will be cruising PCH, with the top down on a 427 Corvette....

[Clem Z.]

Re: Thinking about cashing in my IRA to buy a '67.

i retired at 60 because my financial guy showed me i could and also showed me that the earlier you retire the longer you live. 16 years this june and i am loving it. still play with carbs but only on my schedule.

[Duke W.]

Re: Thinking about cashing in my IRA to buy a '67.

And by the way, my tax advisor says that you pay the 10% penalty if the 401K funds are withdrawn before age 59 and 1/2, not age 55 (I'm not 100% SURE HE'S .

That's correct. My statement of "55" was wrong.

Duke

[Richard T.]

Re: Thinking about cashing in my IRA to buy a '67.

Roger
You have a lot of good advice from fellow members to consider. I pulled some money out of the markets before the severe downturn and bought a couple of cars; one is a 1970 Corvette; I have no regrets. Another couple of things to consider is the yearly cost to insure and the DMV fees.

[John S.]

Re: Thinking about cashing in my IRA to buy a '67.

when i retired i read that as long as i was 55 in the year i retired i could be set up to receive payments from my 401 and ira and not pay a penalty. still being 55 this is a option i could set up to provide me with extra income. if i was close to 59 i would probably take a home equity loan and pay it off after i reach 59 1/2 with funds from the ira. i have a home equity line of credit set up so that if i see a car i like i have money immediately available. if the 67 is something you are going to enjoy i consider it a wise investment. many others have invested in other ventures and have little or nothing to show for it.

[Donald B.]

Re: Thinking about cashing in my IRA to buy a '67.

That's correct. My statement of "55" was wrong.

Duke

Duke you are NOT wrong. You can take starting at 55 if you make the same annual withdrawls for a minimum of 5 years.

[Harmon C.]

Re: Thinking about cashing in my IRA to buy a '67.

when i retired i read that as long as i was 55 in the year i retired i could be set up to receive payments from my 401 and ira and not pay a penalty. still being 55 this is a option i could set up to provide me with extra income. if i was close to 59 i would probably take a home equity loan and pay it off after i reach 59 1/2 with funds from the ira. i have a home equity line of credit set up so that if i see a car i like i have money immediately available. if the 67 is something you are going to enjoy i consider it a wise investment. many others have invested in other ventures and have little or nothing to show for it.

John is right if you retire in the year you turn 55 or later their is no penalty. That was the rules about ten years ago unless they were changed. Taxes can get 30-40% of an IRA withdrawal when added to your income.I pay federal tax,state tax and school tax on my withdrawals.
You can get all the money but at tax time you will have a big bill.

[Paul L.]

Re: Thinking about cashing in my IRA to buy a '67.

Another option is a reverse mortage. The income is not taxable. If you do not wish to pass on money to your heirs this will work. Of course it assumes you have equity in your house.

[Roger A.]

Re: Thinking about cashing in my IRA to buy a '67.

Talked to my guy at the bank. He sugested since I'm close to 59 1/2 ( DEC. 13, 2010 ) That I take out the max I can this year without taking me into the next bracket. This year as the Bush tax cuts run out and Obama will prob let them end. Then Jan 2 take out the amount that gets me to my goal amount, without penalty and only paying the extra income tax. What do you guys think? I guess the next step is tell the wife. I'll let you know how that goes.

[Jim D.]

Re: Thinking about cashing in my IRA to buy a '67.

My thought - these are toys, not investments. I don't finance toys. If I can't pay cash, I don't really need it. My investments are sound as is my retirement. I wouldn't gamble either on a toy.