Joined Feb 2006
L10: Grand Master
Forum Thread
USE 401k to pay for new RV outright, or finance and use it to make monthly payments?
August 21, 2023 at
05:27 AM
in
Finance
(4)
Thread Details
Trying to find out which makes more sense. I am over 59.5 so can access this 401k penalty-free. I have a smallish 401k that I always planned to use to buy a new RV. I am retiring next year so income between myself and my husband will be significantly lower for 2024. I can pay off the entire camper balance (around $30k) by withdrawing the 401k money but I know that money will then be treated like income. Or I can finance the cost and make monthly payments over 5 years or so, but then have to pay the finance charges. Just trying to figure out which makes more sense.
About the OP
11 Comments
Your comment cannot be blank.
Sign up for a Slickdeals account to remove this ad.
you have to consider how the RMD impacts your taxes and how much of a premium you might pay for the stuff getting bumped to the next bracket. if it was non 401k/RMD you'd really just consider rate of return on that money vs the finance rate.
The optimal answer might also be a combination of non 401k savings + 401k RMD. Could even finance it so that you split that extra RMD over 2 years or 3 years.
The RV dealer could also get some $$ for sending a loan to a certain place or using the companies financing so you could use it for some leverage.
You should also see if you could put 5-10K on a credit card and pick up some nice rewards for opening a new credit card.
My 2 cents.
You just don't get it. Its always advisable to have liquid assets available in case you lose your job. It doesn't mean its going to happen, its just good sense.
I know what I can and can't afford. I don't live beyond my means. I came here for some advice as to what course makes more sense financially. Others managed to post without being judgemental.
Sign up for a Slickdeals account to remove this ad.
My 2 cents.
Thank you
The RV dealer could also get some $$ for sending a loan to a certain place or using the companies financing so you could use it for some leverage.
You should also see if you could put 5-10K on a credit card and pick up some nice rewards for opening a new credit card.
That's some good advice. I was able to put the deposit on a credit card, but it was only $500. The rest is cashier's check.
My credit is already near perfect (close to 850). so don't really need to build that up.
I know what I can and can't afford. I don't live beyond my means. I came here for some advice as to what course makes more sense financially. Others managed to post without being judgemental.