John A. Weeks III wrote:
[...]
> You have way too much invested in cars. A normal car loan is
> 3 years. Any longer means that you are buying a car that is
> more expensive than what you can afford. And going out 72
> months is pure and simple financial foolishness.
Hmm, the family I grew up in was pretty frugal, and I distinctly
remember my dad having a five-year loan back in the 1970's. Seems
pretty normal to me from everything I've heard.
> In 5 years, these cars will be wore out and ready
> for the junk heap, yet you will still have payments to make.
You contradict yourself later. Any well-made car purchased today can be
quite serviceable for eight to ten years or more. Whether you buy a car
with loan proceeds or savings does not have any impact on its useful life.
> Do you
> want to lose everything just because a normal life event happens?
One doesn't lose "everything" as a result of a normal life event, only a
catastrophic one.
[...]
> You will need that money when you turn 65. If you spend it now, you
> will end up having to fight the stray cats and dogs for the leftover
> food in the dumpsters. Not only that, but there are huge fees and
> penalties for pulling money out of an IRA (in most cases). If you
> pull out $10K, you may have $5K in fees, taxes, and penalties.
Let's see, even if I was in the 25% federal tax bracket, 8% state
bracket, and 12.5% combined federal and state penalty, that would still
be significantly less than 50% of a withdrawal. Plus, up to $10,000 can
be taken from an IRA penalty-free to make a down payment on a first
home, that is something that was written into the tax law precisely to
encourage this use of an IRA -- which is what the OP was referring to, I
surmise.
Frankly, the stray dogs and cats don't stand a chance... ;-)
-Mark Bole
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