I am so far ahead in car payments I don't actually have a car payment until next year (1/01/2014). I started a reddit thread which came out to about 65% start roth / 35% car loan. I wanted to see insight on a more serious investing forum. Link to reddit thread:
http://www.reddit.com/r/investing/comme ... _roth_ira/
wander wrote:gane wrote:I am so far ahead in car payments I don't actually have a car payment until next year (1/01/2014).
What does delay really mean? It seems the bank does not apply your extra amount to the principle.
My credit union did the same thing when I made a large advance payment. The payment was applied to principal (and thus the interest decreased), but the credit union also allowed me to treat the advance payment as covering my payment for the next few months; it thus listed a new "next payment due date" for the date that I could start paying again and still pay off the loan on the original schedule. I had no intention of doing this, so I had the regular monthly payment withdrawn from my checking account every month until I could make another large advance payment, and then a third one which paid off the whole loan.
I would then get rid of the car loan by paying it off
I would not refinance the loan if you really intend to pay it off
The savings in interest by refinancing your loan if you pay it off in the next 12 months is less than $200
I don't think this is worth the time/hassle factor
crowd79 wrote:How low is your income? It may be more beneficial to first open with a Traditional IRA, since contributions lower your 2012 AGI, which could qualify you for a large "Savers Credit", up to a 50% match on up to $2,000 contributed if your AGI is below $17,250, which you may not otherwise get with a Roth. Between $17,251-$18,750 gets you a 20% credit ($400). Between $18,751 and lower than $28,750 AGI gets you in range for a 10% credit ($200). Convert it to Roth then this year in 2013 or a future year. Unless your AGI is well below $28,750 threshold for instance .... let's say for instance it is $25,000 AGI, then contributing $5,000 to a Roth won't make any difference (Traditional IRA would lower AGI to $20,000, but still within range for a $200 credit either way, for example.). If your AGI is $32,000, then it makes sense to first contribute it to a Trad IRA to get your AGI below $28,750, in range for a $200 credit, and then convert it. I don't think even an initial $5,000 contribution to a Roth IRA would generate enough tax-free gains equivalent to being greater than the $200 in one year. If you are in the 15% tax bracket, your Roth IRA would have to earn over $1,334.00 in the first year to outdo the $200 credit, a 27% gain!....Just something to think about.
runner9 wrote:I'd do the Roth. As for refi to 1.49%, how much money is your time worth? I'd probably do the refi but am sure others would pass.
Refinance does not seem worth my time.
happymob wrote:I vote Roth as well. Ease of pulling out the contributions combined with limited space each year... fund it for 2012 if you can.
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