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

[Duke W.]

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

So what is "72t"?

Duke

[David H.]

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

So what is "72t"?

Duke

Normally, IRA withdrawals BEFORE age 59 1/2 are subject to a 10% penalty for early withdrawal (in addition to federal and state income tax). IRS rule 72t is a provision in the IRA regulations that allows for withdrawals BEFORE age 59 1/2 without the 10% penalty.

You calculate a withdrawal amount based on your life expectancy (you must choose from one of 3 different IRS specified calculation methods). Once a method is chosen, you MUST withdraw the (calculation specified) amount from your account each year for at least 5 years or until you are 59 1/2 whichever period is LONGER.

You still manage your IRA account (buy/sell investments) as you would ordinarily do. The financial institution holding your account reports your withdrawal to the IRS on a 1099. The financial institution will automatically withhold federal income tax and (depending on your state) state income tax.

Here is a link to the IRS.gov page:

http://www.irs.gov/retirement/article/0,,id=103045,00.html

[Ronald L.]

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

Duke:
Agree on the talking heads, those are entertainment shows for couch potatoes...


Martin, I agree with what you said too. I see this mid year market as starting a decline now. Fine the guys +/- 60 that do have disposable income are out there buying their youth cars all over. The new generation could give two rips about old cars in general and as far as that socialist govt, they have all the plans in the world to wipe out the middle class, it is worse that you think. Think about what has happened in the last 3 months that for 15 years before they could not do.

[Clem Z.]

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

Duke:
Agree on the talking heads, those are entertainment shows for couch potatoes...


Martin, I agree with what you said too. I see this mid year market as starting a decline now. Fine the guys +/- 60 that do have disposable income are out there buying their youth cars all over. The new generation could give two rips about old cars in general and as far as that socialist govt, they have all the plans in the world to wipe out the middle class, it is worse that you think. Think about what has happened in the last 3 months that for 15 years before they could not do.

most of us 60+ well 70+ are buying new corvettes as we had the other corvettes growing up and getting out and getting under is not in our DNA anymore.

[Duke W.]

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

Normally, IRA withdrawals BEFORE age 59 1/2 are subject to a 10% penalty for early withdrawal (in addition to federal and state income tax). IRS rule 72t is a provision in the IRA regulations that allows for withdrawals BEFORE age 59 1/2 without the 10% penalty.

You calculate a withdrawal amount based on your life expectancy (you must choose from one of 3 different IRS specified calculation methods). Once a method is chosen, you MUST withdraw the (calculation specified) amount from your account each year for at least 5 years or until you are 59 1/2 whichever period is LONGER.

You still manage your IRA account (buy/sell investments) as you would ordinarily do. The financial institution holding your account reports your withdrawal to the IRS on a 1099. The financial institution will automatically withhold federal income tax and (depending on your state) state income tax.

Here is a link to the IRS.gov page:

http://www.irs.gov/retirement/article/0,,id=103045,00.html

Now I understand, and the 2002 IRS Bulletin that establishes this provision is here:

http://www.irs.gov/pub/irs-irbs/irb02-42.pdf

I wasn't previously aware of this provision to annuitize a IRA prior to age 59 1/2 without penalty, but this could be a good deal for anyone who would like to retire before 59 1/2, but is a little short on cash flow to make the move.

The only problem today is that the annuity amount calculation is based on 120 percent of what's call the "federal midterm rate", which is calculated on a basket of Treasury securities, and with rates so low, today, the annual payment would be much lower than what it was when rates were at a cyclic peak in 2006.

In fact, anyone who made the election to annuitize in mid-2006 got a helluva deal by current standards.

Duke

[Phil D.]

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

I see this mid year market as starting a decline now. Fine the guys +/- 60 that do have disposable income are out there buying their youth cars all over. The new generation could give two rips about old cars in general

I've always been convinced that demographics play a significant part in driving collector car prices. It would be interesting to compare what happened with values on much older collector cars, like from 30s and earlier (in original condition, not hot rods). I remember when I was a teenager asking my grandpa to tell me about his first car, his eyes lit up and he must have talked for the next three hours about his 1927 Chevrolet that he bought brand new. I wonder did values peak for 1927 Chevys in about 1970? Wish I knew where to look for that kind of info.

While each new generation seems to be less and less interested in cars percentage-wise, I wonder if by sheer volume, the number of "car-guys" will continue to grow. There's hope. I was driving my 69 in the neighborhood one day and passed a mother walking two kids, one a little girl, couldn't be more than four years old. The little girl stopped in her tracks, swung around and pointed until I was out of sight and yelled "Look at that car!" Mom and the little boy seemed unimpressed but that little girl will grow up and buy a Corvette someday.

[Terry M.]

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

The current generation of "car guys" are into rice mobiles with fart pipe exhausts. Much as we deride them here they do put some craftsmanship into those cars, and some money. The cost of a new Corvette is beyond most of them -- at least those who do not operate a pharmacy out of their glove box.

While I don't share Ronald's pessimism about the future of the automobile or the hobby, both will change to something other than what we have known. That is life, and car guys will change with the times. Our task is to preserve what was.

Phil I have two very fond memories of driving my 1970. When my daughter was in elementary school, all of two blocks away, she badgered me to drive her to school in the Corvette on opening day several years running. This was in the range of 1987 or so. I figured I would impress the "soccer moms" in the minivans, but Zoe's aim was a little different. I still remember the boys lined up against the school yard fence, and I could see them mouthing the word "Corvette." I still wonder how it was kids of that age were able to identify a C3 as a Corvette -- they had to be reading the car mags instead of school books.

I hope some of them are able to afford one some day -- and that is my concern: One that there will be a Corvette for them, and even more importantly that they can have that goal.

[Clem Z.]

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

The current generation of "car guys" are into rice mobiles with fart pipe exhausts. Much as we deride them here they do put some craftsmanship into those cars, and some money. The cost of a new Corvette is beyond most of them -- at least those who do not operate a pharmacy out of their glove box.

While I don't share Ronald's pessimism about the future of the automobile or the hobby, both will change to something other than what we have known. That is life, and car guys will change with the times. Our task is to preserve what was.

Phil I have two very fond memories of driving my 1970. When my daughter was in elementary school, all of two blocks away, she badgered me to drive her to school in the Corvette on opening day several years running. This was in the range of 1987 or so. I figured I would impress the "soccer moms" in the minivans, but Zoe's aim was a little different. I still remember the boys lined up against the school yard fence, and I could see them mouthing the word "Corvette." I still wonder how it was kids of that age were able to identify a C3 as a Corvette -- they had to be reading the car mags instead of school books.

I hope some of them are able to afford one some day -- and that is my concern: One that there will be a Corvette for them, and even more importantly that they can have that goal.

i took my grandson Max to kindergarten in the C-5 every day because we had no bus service and all his kindergarten buds would tell him "cool car Max" and he would just smile. he is now in high school and gets his license this year but my insurance does not cover anyone under 25 years of age. "THANK GOD" as i have a good excuse

[Ray G.]

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

Thinking about cashing in my IRA and buying a 1967 I found. Not getting crap for my money in the IRA. I think I can convince the wife it's a better deal. Anyone else done it? Thanks!

Hello;

Concerning a wife approval of a Corvette purchase.

Is the punch line; "I'll miss her"

[Michael M.]

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

None of us know how long we will be here. There is a healthy point of fiscal responcibilities for you and your family. Now that my girls are out of college and working, we chose to have some fun. I'm blessed to have a wife who enjoys these cars almost as much as I do (buying her a conv helped some ). Purchased a new zo6 and 67 coupe within 4 months of each other. Don't want to look back when we can no longer drive and enjoy these great cars and say would have, could have, sould have.
If you can afford it go for it and only you know that.

[Clem Z.]

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

None of us know how long we will be here. There is a healthy point of fiscal responcibilities for you and your family. Now that my girls are out of college and working, we chose to have some fun. I'm blessed to have a wife who enjoys these cars almost as much as I do (buying her a conv helped some ). Purchased a new zo6 and 67 coupe within 4 months of each other. Don't want to look back when we can no longer drive and enjoy these great cars and say would have, could have, sould have.
If you can afford it go for it and only you know that.

that is also my theory"never deny yourself the finer things in life" i plan on dieing broke and sticking the undertaker with a bad check.

[Ridge K.]

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

None of us know how long we will be here. There is a healthy point of fiscal responcibilities for you and your family. Now that my girls are out of college and working, we chose to have some fun. I'm blessed to have a wife who enjoys these cars almost as much as I do (buying her a conv helped some ). Purchased a new zo6 and 67 coupe within 4 months of each other. Don't want to look back when we can no longer drive and enjoy these great cars and say would have, could have, sould have.
If you can afford it go for it and only you know that.

EXCELLENT comment, in my opinion....

[Don H.]

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

my gramps used to say "money's round, made to roll." I've never forgotten that. If I have what the family should reasonably need in terms of money to live into the foreseeable future (we do), what I get beyond that is getting spent on enjoying life. Right now, part of that is driving, tinkering with, and showing off the 65 Sting Ray. I have not had a toy this enjoyable since before I had kids, which was eons ago. This kind of thing keeps you young. Go for it !

[Paul J.]

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

About 9 years ago I was looking at a new Harley. I had'nt ridden bikes in years, and even though the purchase was OK with the wife I still could'nt get off the fence and spend that kind of money.

One day I was on my annual trip to Wal-Mart and waiting for my wife by the carts. An older man in his 60's walked up to get a cart. He had a pronounced limp and appeared to slightly drag one leg. After he got a cart he looked perfectly normal, except now I could clearly see that part of his face was paralyzed. SNAP, like a thin glass rod, something in my mind went snap. That could be me tomorrow. The next day I walked into the dealership and ordered the bike.

If you want it, buy it while you can and don't take the chance of having regrets for not taking the opportunity. Vette prices will fluctuate, but the cars are reasonably sound investments. You can always sell it and get most of your money or even more out of it.

[Martin T.]

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

Alright, here's a possible win/win. Determine what you can comfortably invest. There are a lot of investments out there that are paying some good rate of returns (inclusive of real estate). Look at financing your purchase on a Corvette that you can drive and not worry about (it may be a NOM BB). See if you can get the investment to pay for the car without liquidating your IRA. If so, you are spending interest on principal you are retaining and not screwing yourself or your family.