Retired, married, been wanting to do it for years, gonna bite the bullet.
Have decided on a used Class A diesel pusher. I need advice on financing.
Here's what I'm thinking:
Spend $40-50K. Buy around August 2012.
Withdraw $15K from 401K, put 5K down, finance the rest. Use remaining 10K for maintenance, fuel, park fees, and payments for the rest of year.
Withdraw $15K 2013 for same.
Sell RV 2014 for $20-30K.
Fire away! Any comments at all will be appreciated.
If you think about this it may not work. It is much more difficult to get a lona on a MH that is older than 10 years in many cases. A $5K down payment is not much on a $50K unit. You may need a lot more down on an older unit and excellent credit at that. Remember that what you take out of 401K is also going to be taxable in that year. Taxes will add a couple of thousand to that amount.
2003 Newmar Mountain Aire, Workhorse W22, 2008 Saturn Vue, Falcon 5250, & US Gear Unified Tow Brake
Retired you may need closer to 30% down. I would either pull out enough cash to buy the rv, or save a year or two for a down payment. No sence pulling otu of your 401k and paying taxes on it + paying interest + paying taxes next year to pay more interest.
Remember that what you take out of 401K is also going to be taxable in that year. Taxes will add a couple of thousand to that amount.
Depending on your tax bracket it could easily be 3,000 or more, especially if you are not 59.5 or older. Whoever holds your 401K will usually withhold 20 percent unless you tell them differently so you would need to take out more than 18,000 to get 15,000.
John & Doris Doris and Robbies Blogs 2007 Tiffin Phaeton QDH 40 w/Cat 7 350
2004 Liberty Renegade 4x4 Toad
Roadmaster Falcon 2 tow bar
Air Force One toad braking system
FMCA F380583, PA, Good Sams
For those who wouldn't pull anything out of the 401K I would ask what is the money for? If there is enough there it is OK to use as long as they are prepared for the tax consequences. $15-20K pulled out may very well change a tax bracket and require higher taxes.
Look, there are ways to get around the 401k
everyone thinks it's this huge thing and it's not.
it's simply an influx of money that you have to pay tax on. Because you didn't pay tax on it when you put it away (it's pre-tax money)
but if your income this year is very low, adding some more income (401k - IRA) may not push you up. Or, if you have huge deductions (business depreciation big medical expenses, whatever) then you can offset that by taking the 401k out. If you are under 59.5 you have to pay 10 percent to the mafia, err I mean gov. but it's definitely possible to just have to pay the 10 percent. Big deal. anyone here think 10 percent isn't bad as a total tax rate?
anyone here think the tax rates are going to be lower in the future
I've done it twice. (1 401k, 1 IRA) and paid nothing but the 10 percent penalty (I'm well under 59.5). That's way better than I did as a wage slave (figure 30 to 40 percent just like most people). Note that they do withhold at the 20 percent rate, but if all you have to pay is the penalty (or you are over 59.5), then you get it back on the following years return.
You have to look at YOUR situation and evaluate if it works for you.
Having $10K for the first year and $15 for the next to include fuel, park fees, maintenance, and loan payments for a used diesel pusher is a bit optimistic. We have had several used DP's and just about every time it needs maintenance the bill is $2000 to $4000 dollars. Tires are a big expenditure and a lot of used DP's need new ones.
On that tight a budget and to keep for such a short time, I would look at a gasser. Cheaper maintenance. Gas is cheaper than diesel right now.