woodrunner
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Joined: 25 Jun 2007
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Hi,
You seem to be very knowledgeable.
I don't know what forum to go to so I thought I would ask it here.
I'm retired from a state job and receive a retirement check($2400/mo). I now work for an oilfield service CO. as an environmentalist and make a pretty good salary. $72,000.
I still owe some on my house $60,000. I'm putting some in a 401K ($15,000) and saving $2,300/month of my retirement and putting it in a CD.
Aside from everyday living expenses the house note is all I have.
My question is, should I pay off my house with my retirement or continue saving it? My mortgage is 5.75% $1000/month. I'll pay off my house in about 4-5 years at the rate Im going. I could pay it off in 2 years if I used most of my retirement check.
Any advise would be appreciated.
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Thu Jul 26, 2007 5:47 pm |
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oldguy
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Location: arizona
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The primary variable is the return on your $2300/mon. If you save the money in CDs you are losing money and you should prepay the loan (you are paying more interest on the loan than the CD brings in). If, instead, you invest the $2300/mon in a 12% mutual fund or index fund, then you should keep your loan for the full term.
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Thu Jul 26, 2007 5:55 pm |
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woodrunner
New Member
Cash: $ 0.85
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Joined: 25 Jun 2007
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I've been keeping the retirement in something safe for now at around
5.5%.
I will consider paying of my mortgage, however.
Thanks
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Thu Jul 26, 2007 9:05 pm |
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coaster
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When do you think you'll be needing the money that you're saving?
~Tim~
Eye Candy : Why Whimsy
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Fri Jul 27, 2007 1:09 am |
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woodrunner
New Member
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Three or four years.
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Fri Jul 27, 2007 5:09 pm |
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coaster
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For that short of a time it's usually recommended that you not take any risk. Since the only investment that doesn't have any risk isn't going to yield more than around five percent, then you're ahead paying off the loan. If you can commit the money to ten years or longer, then you'd get a better return by keeping the loan and putting the savings in stocks. You might get a better return in three or four years, but since we're probably coming to the end of a bull market, it's not highly likely and certainly not 100%
~Tim~
Eye Candy : Why Whimsy
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Fri Jul 27, 2007 5:25 pm |
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woodrunner
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Cash: $ 0.85
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Joined: 25 Jun 2007
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OK ,
Thanks guys.
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Mon Jul 30, 2007 12:41 pm |
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