Earn 40K, no dependents, SEP IRA of 400K, 20 in VISA, no other debt. Better to fund IRA or pay down card.? - dependent ira
September Cash IRA is part of the equity, which tends to earn about 7 percent per year. Cred Card Debt approximately 8 percent. September IRA contributions are tax deductible. Male, 51 years.
Saturday, January 23, 2010
Dependent Ira Earn 40K, No Dependents, SEP IRA Of 400K, 20 In VISA, No Other Debt. Better To Fund IRA Or Pay Down Card.?
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Assume that you can put in an additional $ 5000 per year.
ReplyDelete$ 5000 worth of interest on credit cards - $ 400
A profit of $ 5000 in IRA 350
Suppose you are at a height of 15% tax, you can get $ 750 in the form of taxes.
In terms of wealth creation, it would be better than dumping in the IRA.
You do not mention that other investments, in addition to the IRA in September If so, then I want to earn extra money from the high-yield savings or money market account.
ReplyDeleteAt the same time (or alternate) should pay for visas and can act as an account of the "emergency" in an emergency - you want to have space on the card if you desperately need one days especially if they have no emergency savings.
Anyway, you pay your VISA card soon - no reason to pay 8% on a balance of credit card. Earn 7% in the IRA is not guaranteed - IS 8% interest you will pay.
You do not mention that other investments, in addition to the IRA in September If so, then I want to earn extra money from the high-yield savings or money market account.
ReplyDeleteAt the same time (or alternate) should pay for visas and can act as an account of the "emergency" in an emergency - you want to have space on the card if you desperately need one days especially if they have no emergency savings.
Anyway, you pay your VISA card soon - no reason to pay 8% on a balance of credit card. Earn 7% in the IRA is not guaranteed - IS 8% interest you will pay.
Do you have to use debt? Seriously, if they are using the debt, then there is no head. If you choose not to use credit again to pay for their visa sprint as soon as possible. Since you have a very good start to your IRA, the back, while the financing that you pay your Visa card. But quickly, quickly, quickly, so you can cope wealth for retirement. Do not use the money to pay for this retreat. The penalties are too stiff.
ReplyDeleteI suggest you read Total Money Makeover by Dave Ramsey. Looks like you're in step 2 in small steps (I assume you have) at least $ 1000 into a fund for emergency relief in emergencies. You do not have debt in 2 years or less, if not more than $ 1,000 in emergency funds. If you have more than $ 1000 into an emergency fund, then use the surplus to pay for the visa. If the visa will be paid from 3-6 months to build the cost of an emergency fund, then 15% of their income are retired.
The interest rates are not important to get out of debt. Debt always invest removedtion in the future. Rapid debt reached more quickly to spend money for things you want to buy!
I would pay the debt. It is the knowledge of the 8% who pay out of pocket. I hope you have a great diversity in your portfolio, as a good general equity funds and / or bonds. I like the Vanguard S & P 500 INDEX, but not as much as you do.
ReplyDeleteThere is an "investment", because all costs little, but there are some tax advantages of home ownership into account. The debt ratio is to have very decent enough. Even if you be aware of a car loan, that the payments.
Hope this helps
Even taking account of deferred taxes at the end of the debt by more than what losing investments are obtained, and that mathematics smartest thing to do is pay the bill.
ReplyDeleteIt would probably be the smartest thing even if it nearby, because of unexpected peace "," you feel in the morning when you wake up with no debt!
Good luck!